Banks should open 25 pc branches in unbanked areas: RBI

The Reserve Bank today asked banks to comply with the prescription of opening at least 25 per cent of new branches in a year in unbanked areas with a population less than 10,000.

"At RBI we have said at least 25 per cent of all the branches opened in a given year should be opened in unbanked areas with population of less than 10,000," RBI Governor D Subbarao told a state-level conference of bankers here today.

"I hope that prescription would be complied with (by all the banks). It should be done in consultation with state government," the Governor further said while referring to financial inclusion and awareness drive.

Giving further direction to bankers, Subbarao said that it has agreed to take forward financial inclusion programme more meaningfully in Jammu and Kashmir.

"In this model of financial programme, we have agreed to train business correspondents for the programme," he said.

"We have open physical branches --certainly 25 per cent among new branches," he added.

Having conducted an outreach programme at Surara village in Samba district of Jammu and Kashmir as part of its financial inclusion and awareness drive, RBI had yesterday said that 70,000 villages in the country have been identified for access to banking under financial inclusion programme.

"So, since it is not possible or expensive to open branch in all 70,000 villages. We are covering some of them to banking corresponding model and some through other models", he said.

"This is collective effort of central government, banks to provide banking facilities to low income house hold groups in the country", he said.

Governor touched upon the important functions of RBI viz issuing and managing currency, controlling inflation through formulation of monetary policy,expanding outreach and banking awareness, deposit insurance scheme.

He also highlighted the facilities of 'no frills account', general Credit Card, Kisan Credit Cards and overdraft facilities against these accounts.

Source: EconomicTimes