The Finance Ministry of India has asked all banks, including
private sector lenders, to open branches in locations with
population of more than 5,000 in the under-banked districts by
September, 2012.
The Reserve Bank of India has identified 296 districts, which
are under-banked, spread across 18 states and union territories
across India.
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The Indian Finance Ministry has said, in its recent guideline on
financial inclusion, that such branches could initially have lesser
staff, with ATM facilities.
The staff strength could be increased depending on the
growth of the business, the Finance Ministry
has said.
The new bank branch opened would also provide banking services
in the adjoining areas.
“While planning for branch expansion, it may be seen that in the
unbanked areas the branches are available within a radial distance
of 5 km,” the Indian Finance Ministry has said in the
guidelines.
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By GlobalDataOnly 5% of the villages in India,
approximately, have bank branches.
With the Financial Inclusion Plan under
implementation, approximately 73,000 villages,
with a population of 2,000 and above, would be provided banking
service facilities by March 2012.
In other districts, banks must try to open as
many brick and mortar branches, in their service areas, in areas
having population of 10,000 and above by September 2012, the Indian
Finance Ministry has instructed.
According to the branch authorisation policy
of the Reserve Bank of India, prior approval from the central bank
is not required to open branches in Tier-III to Tier-VI areas.
As of June 2011, banks have opened banking
outlets in over 100,000 Indian villages, up from 54,258 as on March
2010. Out of these, 22,870 villages have been covered through brick
and mortar branches.
