The RBI has decided to set up a committee comprising all stakeholders for studying the advisability of granting new urban co-operative banking licences. Also, the RBI has decided to allow well-managed UCBs to set up off-site ATMs without seeking approval through the annual business plans.

Detailed guidelines in this regard will be issued by mid-May 2010. Earlier RBI had decided in 2004 not to set up any new UCBs. However, following the consolidation happening in the segment, the financial condition of the UCB sector has improved considerably and UCBs have also been allowed to enter into new areas of business.

The UCBs, which are well-managed and meet the regulatory criteria, are required to submit annual business plans, based on which centres are allotted to them according to their choice for opening of branches. Centres where UCBs desire to open off-site ATMs are also required to be included in their annual business plan, said RBI..

With a view to increasing banking penetration and promoting financial inclusion, domestic commercial banks, both in the public and private sectors, the RBI will now discuss Financial Inclusion Plan (FIP) with individual banks and monitor their implementation. The RBI has deliberately not imposed a uniform model so that each bank is able to build its own strategy in line with its business model and comparative advantage.

The RBI has decided to permit banks to engage any individual, including those operating common service centres (CSCs), as BC, subject to banks? comfort level and their carrying out suitable due diligence.