The Reserve Bank of India (RBI) on Thursday eased the norms of setting up bank branches and said branches manned by either bank’s staff or its business correspondents where services are provided for a minimum of four hours per day for at least five days a week will be called a banking outlet. “A banking outlet which does not provide delivery of service for a minimum of four hours per day and for at least five days a week will be considered a part-time banking outlet,” it said. The central bank said a banking outlet or a part-time banking outlet opened in any tier-III–tier-VI centre of North-Eastern States and Sikkim as well as in any tier-III–tier-VI centre of Left wing extremism (LWE)-affected districts will be considered as equivalent to opening it in an unbanked rural centre (URC).
It defined URC as a rural (tier-V and VI) centre that does not have a CBS-enabled banking outlet of a scheduled commercial bank, a small finance bank, a payments bank or a regional rural bank nor a branch of local area bank or a licensed co-operative bank. However, RBI clarified that ATMs, e-lobbies, bunch note acceptor machines (BNAM), cash deposit machines (CDM), e-kiosks and mobile branches will not be treated as banking outlets.
“The time given to a bank for opening an outlet in a URC is one year. If a bank fails to adhere to the requirement of opening 25% banking outlets in a year, appropriate penal measures, including restrictions on opening of tier-I branches, may be imposed,” it said. To encourage banks to front load more number of banking outlets in unbanked rural centres, the RBI said lenders will be allowed to carry forward the benefit of the banking outlets opened in excess of the requirement for a period of next two years.
‘Lenders should have CFOs, CTOs’
With “rapid” changes in banking sector, the RBI on Thursday urged banks to appoint qualified persons to head critical finance and technology functions. The central bank also came out with minimum qualifications for chief financial officers (CFOs) and chief technology officers (CTOs).
“Rapid innovations in banking and technology call for better risk governance in the areas of finance and technology. A CFO and CTO in banks’ management structure would play a crucial role in strengthening and sustaining the banks’ risk governance framework,” the RBI said in a notification. The RBI said a CTO should be an engineering graduate, or hold an MCA or equivalent qualification with 15 years’ experience in banking IT projects, while a CFO should be a chartered accountant and have an experience of 15 years.