Section 23 of the Banking Regulation Act, 1949 - Master Circular on Branch Licensing - Regional Rural Banks (RRBs) - आरबीआय - Reserve Bank of India
Section 23 of the Banking Regulation Act, 1949 - Master Circular on Branch Licensing - Regional Rural Banks (RRBs)
RBI/2007-2008/63 July 2, 2007 The Chairmen of all Regional Rural Banks/Sponsor Banks Dear Sir, Section 23 of the Banking Regulation Act, 1949 - Reserve Bank of India has been issuing instructions to RRBs regarding opening/shifting/merger of branches/extension counters/offices, etc. from time to time. With a view to consolidating all the current instructions and incorporating certain changes made therein recently, a master circular has been prepared to enable RRBs to peruse the required information at a single source. The master circular consolidates all instructions relating to branch licensing of RRBs issued till date. Please acknowledge receipt to our respective Regional Office. Yours faithfully, (G.Srinivasan) Contents 2. Opening of Branches/Services Branches/ Satellite Offices/ Controlling Offices/Area Offices 3.1 At Rural Centres- Within the Block and Service Area 4. Conversion of full-fledged branches into satellite/mobile offices 5. Opening of Extension Counters 6. Upgradation of Extension Counters into full-fledged branches 8. Classification/Re-classification of centres Master Circular on Branch Licensing in respect of Regional Rural Banks (RRBs) The opening of branches by banks is governed by the provisions of Section 23 of the Banking Regulation Act, 1949 In terms of these provisions, banks cannot open a new place of business in India or abroad or change otherwise than within the same city, town or village, the location of the existing place of business without the prior approval of the Reserve Bank of India (RBI). Thus, it is mandatory for RRBs to seek prior approval/ licence from Rural Planning and Credit Department (RPCD) of RBI before opening of new branches/offices. RRBs should obtain prior approval of their Boards of Directors before applying for opening/merger/shifting/conversion of branches/offices etc. The proposal for opening, shifting, merger or conversion of branches is to be submitted to the respective Regional Office of NABARD in the prescribed application Form VI (Rule 12) of Banking Companies Rules.1949 (Annex-I), with an advance copy thereof to the concerned Regional Office of the Reserve Bank. The Empowered Committees (ECs) for RRBs, constituted by the Reserve Bank at its Regional Offices, would deliberate and make recommendation on such applications. The Reserve bank would take into account the EC's recommendation and dispose of such applications expeditiously. No separate approval of sponsor bank is required. Further, approval of the sub-group of District Consultative Committee (DCC) will also not be required for opening of branches. However, in case of shifting / merger/conversion of branches, approval of the sub-group of DCC will be required. 1.2 Conditions for opening of new branches RRB should fulfill the following conditions to become eligible for opening of new branches. With a view to encouraging RRBs to open branches in hitherto uncovered districts, the compliance with conditions prescribed at Serial Nos. (iii) to (v) above may be left to the discretion of the concerned Empowered Committee for RRBs. 2. Opening of Branches/Controlling Offices/Area Offices 2.1. Branches at Rural/Semi-Urban/Urban and Metropolitan Centres The RRBs can identify rural centres (population up to ten thousand), semi-urban centres (population more than ten thousand but up to one lakh), urban centres (population more than one lakh but up to ten lakh) and metropolitan centres (population more than ten lakh) for opening of branches depending upon the business potential and profitability of the proposed branches. Note: Population criteria mentioned above will be as per the latest census report figures of the centre (revenue unit and not locality). The proposals of RRBs for opening of new branches will be considered by RBI on a very selective basis and on merits of each case, taking into consideration the overall financial position of the RRB, quality of its management, efficacy of the internal control system, profitability and other relevant factors. RRBs may be allowed to set up Service Branches / Central Processing Centres (CPCs) / Back Offices exclusively to attend to back office functions such as data processing, verification and processing of documents, issuance of cheque books, demand drafts etc. and other functions incidental to their banking business. These offices should have no interface with customers and would not be allowed to be converted into General Banking branches. These offices would be treated on par with a branch and the RRBs shall be required to obtain necessary licence from the concerned Regional Office of RBI (RPCD). 2.3. Requirement for conduct of State/Central Government business If any branch proposes to undertake government business, it would require prior approval from the concerned Government authority and RBI. The RRB should approach the concerned Regional Director, RBI for conducting business of the State Government and the Department of Government & Bank Accounts, RBI, Central Office, Mumbai in regard to the Central Government business. 2.4. Opening of Controlling Offices/ Area Offices After the process of amalgamation of RRBs started in September 2005, a large number of RRBs have been amalgamated till date. Consequently, there are now new RRBs as a result of amalgamation and old RRBs which have not undergone amalgamation. Amalgamated RRBs having 75 branches will be allowed to open Controlling Offices in the ratio of one Controlling Office for every 50 branches. RRBs (which have not undergone amalgamation), having 50 or more branches, are allowed to open Area Offices in the ratio of one Area Office for every 25 branches. The Area Offices/ Controlling Offices are not permitted to transact any banking business. However, RRBs are required to obtain licences from the concerned Regional Office of RBI (RPCD) prior to functioning/opening of these offices. RRBs can either shift or close/merge these offices at their discretion without prior approval of RBI, but they are required to ensure that the licence is submitted to the concerned Regional Office of RBI (RPCD) for getting the new address incorporated in the licence at the earliest, but not later than three months from the date of shifting. As regards closure/merger of such offices, the licence has to be surrendered to the concerned Regional Office of RBI (RPCD) for cancellation immediately after the closure/merger of the office under advice to the Department of Statistical Analysis and Computer Services (DESACS) of RBI. 2.5. Validity of Authorisations and Licences Presently authorisations are issued to RRBs for opening of branches based on the requests received from them (through NABARD) on merits of each case. With a view to ensuring expeditious utilisation of authorisations and actual establishment of the branch, it has been decided to limit the validity of authorisation to a maximum period of two years. Further, RRBs often approach for approval for change in name of a branch due to change in name of the locality or street/road where the branch is located. Since there is no change in location of the branch, banks need not seek approval or approach for amendment to licence in the matter, but intimate the change to the concerned Regional Office of RBI (RPCD) and DESACS, Mumbai. Changes may also take place due to change in name of taluk/district or reorganisation of districts or formation of new States. Under such circumstances, too, RRBs need not forward the relevant licence/s to the Regional Office for amendment and may adopt the changed name on the basis of Government Notification, under advice to the concerned Regional Office of RBI (RPCD) and DESACS, Mumbai. 3.1 At Rural Centres - Within the Block and Service Area The shifting of branches in rural centres may be effected by RRBs themselves without obtaining the prior approval of RBI, subject to their complying with the following conditions:
- It should be ensured that the relocated branch would be able to cater adequately to the banking needs of the villages allocated under Service Area Approach. In case the semi-urban branches of RRBs have been allocated service area, the same norms of shifting of branches in rural centres would also be applicable for semi-urban centres. Where no service area has been allotted, RRBs may shift their branches at semi-urban centres within the same locality/municipal ward without the prior approval of RBI. It should, however, be ensured that the locality/ward is not rendered unbanked due to the shifting of branch/es 3.4. Procedural rationalisation RRBs may shift their branches as indicated above (paras 3.1 to 3.3), but ensure that the licence is submitted to the concerned Regional Office of RBI (RPCD) for getting the new address incorporated in the licence at the earliest but not later than three months from the date of the shifting of the branch. 4. Conversion of full-fledged branches into satellite/mobile offices The RRBs may themselves decide the need for conversion of the existing loss making branches into satellite/mobile offices keeping in view the cost-benefit aspect, the likely inconvenience that may be caused to the existing clientele, the effect of the conversion on the performance in the preparation of district credit plan and priority sector lending. The following guidelines may be followed by the RRBs in respect of satellite offices: Conversion of branches into satellite offices at centres other than rural is not permissible. The scheme of mobile offices envisages the extension of banking facilities through a well protected van with arrangements for two or three officials of the bank sitting in it with books, safe containing cash, etc. The mobile unit would visit the places proposed to be served by it on certain specified days/hours. The mobile offices would be attached to a branch of the RRB. The mobile offices should not visit the rural places which are served by co-operative banks and places served by regular offices of commercial banks. 5. Opening of Extension Counters The RRBs, with the approval of their Boards of Directors, can open Extension Counters at the premises of the institutions of which they are principal bankers after obtaining licence from the concerned Regional Office of RBI (RPCD) for the purpose. Extension Counter can be opened within the premises of big offices/factories, hospitals, military units, educational institutions, etc. where there is a large complement of staff/workers, students, who because of their identical working hours and non-availability of banking facilities at a reasonable distance find it difficult to carry out their banking transactions. The Extension Counter should carry out limited type of banking business, such as,
- issuing and encashment of drafts and mail transfers - issue and encashment of travellers cheques - sale of gift cheques - collection of bills - advances against fixed deposits of their customers (within the sanctioning power of the concerned officials at the extension counter) - facility of safe deposit locker (provided adequate security arrangements are made) Further, if the Extension Counter proposes to undertake government business, it would require prior approval from the concerned Government authority and RBI as stipulated under paragraph 2.2 above. Extension Counters are not allowed to be opened at residential colonies, shopping complexes, market places and places of worship, etc. RRBs should furnish particulars of the proposed Extension Counters in parts I and II of the format, given in Annex -II, to the concerned Regional Offices of RBI (RPCD), while applying for licence prior to opening of Extension Counter. 6. Upgradation of Extension Counters into full-fledged branches
- The number of deposit accounts exceeded 2000 during the last one-year. - The average deposits (i.e. on a monthly basis) for the last three years are not less than Rs.2 crore. 7. Automated Teller Machines (ATMs) 7.1. RRBs need not obtain permission of RBI for installation of ATMs at branches and Extension Counters for which they hold licences issued by RBI. RRBs should, however, report to the concerned Regional Office of the Reserve Bank (RPCD) and DESACS as and when ATM is installed at a branch or an Extension Counter. 7.2 In case any RRB wishes to set up an off-site ATM in its area of operation, it may do so after assessing the cost and benefit. Prior approval of RBI need not be obtained, but on opening of such ATMs, RRBs should immediately inform the respective Regional Office of the Reserve Bank (RPCD) for the purpose of getting a formal authorisation for the place of business. 8. Classification/Re-classification of centres RRBs are advised to ascertain the population group classification of the centres of which they are not sure, from RBI, DESACS, Banking Statistics Division, C-8/9, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051 before approaching RPCD for opening of new branches. Any query with regard toreclassification of centres also may be referred to DESACS by the Head Office of the RRB along with relevant documents such as Gazette Notifications, etc. in support of the change. 9. RRBs which are freed from Service Area Obligations RRBs, which are at present freed from Service Area Obligations, are generally not allowed to open new branches. They may, however, relocate their loss making branches at Taluka/Block headquarters, village markets, mandis, agricultural produce centres or similar centres (hereinafter referred to as 'specified centres') preferably within the same block. Alternatively, they may convert their loss making branches into Satellite/Mobile offices. Further, where two loss making branches of any RRB are in close proximity to each other (i.e. within a distance of about 5 kms.), they may consider merging the two branches. 10. RRBs which are not freed from Service Area Obligation (i) RRBs, which have to adhere to Service Area approach, can relocate their loss-making branches at specified centres within their Service Area only, or may consider converting loss-making branches into Satellite/Mobile Offices provided such relocation/conversion does not impair continued performance of Service Area obligations. (ii) In case another branch of the same RRB is operating within a distance of about 5 kms in a geographically contiguous Service Area, these RRBs may consider merging the two branches with a view to rationalising the spatial spread and reducing establishment/operating costs. (iii) RBI will consider on a very selective basis, the proposals of these RRBs for opening of new branches at specified centres within their area of operations subject to fulfillment of conditions specified under paragraph 1.2 above. 11. Submission of Returns on Branch Banking (i) Immediately on opening of a place of business, all RRBs are required to inform the date of opening and the postal address of the office/branch to the Central Office and the concerned Regional Office of RPCD. (ii) In terms of Rule 13 of the Banking Regulations (Companies) Rules, 1949, the RRB is required to submit a list relating to its offices in India in Form VII within a period of one month from the close of every quarter to the office of RBI situated in the state in which its Head Office is located. (iii) Further, RRBs should submit returns in the Proformae given in Annex - III, as advised in Circular RPCD.CO.RRB.BL.BC.10/ 03.05.90A/2005-06 (RBI/2005-06/46) dated July 6, 2005, relating to the new offices/branches opened and change in status due to merger, etc. of existing offices/branches effected during the quarter to DESACS (Banking Statistics Division) and the concerned Regional Offices of RPCD within 14 days of the month succeeding the quarter to which they relate. While submitting the current quarter Returns, the previous quarter's reference must be quoted in the forwarding letter. 'Nil' Returns must be sent to DESACS and the concerned Regional Offices of RPCD in case there is nothing to report on opening/closing/change in status, etc., of any office/branch/NAIO (Not Administratively Independent Offices like Extension Counters, Satellite Offices, ATMs, etc.) during a quarter. List of Circulars consolidated by the Master Circular
|
हे पेज शेअर करा:
भारतीय रिझर्व्ह बँक मोबाईल ॲप्लिकेशन इंस्टॉल करा आणि नवीनतम बातम्यांचा त्वरित ॲक्सेस मिळवा!
