While the government has been giving a major thrust to Jan-Dhan Yojana and including the bottom of the pyramid in the financial fold, the sheer number of unbanked centres show that the job is far from complete.Given the unbanked centres still outweigh banked centres 11 to 1—according to RBI data there were 555,782 unbanked centres versus 49,686 banked centres as on December 31, 2015, one would assume that the thrust of the policy would be on opening more branches, but the central bank is set to adopt a more modern approach in defining inclusion. If the RBI accepts the report of an internal working group, it will redefine the meaning of a bank branch, which would help not just the existing players, but also the new entrants like payments bank and small finance banks.
Though bank branches in rural areas are important, today ATM machines are equipped to do most of the functions that a branch can. Considering this, the report highlights RBI will accept a fixed point outlet like an ATM which is manned by a bank employee or a banking correspondent as a bank branch. While banks would be required to conform to the 25% branch rules, they would not have to go by the old model of brick and mortar branches which would reduce cost and allow them to expand their network. The committee still did not recognise mobile branches as banking outlets, but with people getting more attuned to the idea of mobile banking, it won’t be long before RBI revises these guidelines as well.