Public sector banks, both big and small, are together planning to open around 2,500 branches in smaller towns in the six months. This follows the liberal branch authorisation policy of RBI, by which banks, excluding foreign and rural regional ones, are free to open branches in tier 3 to tier 6 centres (with population of up to 50,000) without prior permission.
Banks have lined up plans to reach out to customers in remote unbanked areas, where almost 50% of new branches will be located.
The country?s largest bank, State Bank of India (SBI), is planning over 1,000 branches in areas falling in tier 3 to tier 6 centres. ?We are now preparing our business plans and in next six months will open over 1,000 branches,?? said a senior SBI official.
According to Punjab National Bank chairman & managing director KR Kamath, his bank is planning to open 450 branches during the next fiscal in rural areas with a population of less than 50,000.
?Of course, this move will be besides the 102 licences that RBI has already provided us for opening new branches. As we have a strong presence in the Indo-Gangetic belt and states like Punjab and Haryana, most of the new branches in rural areas will be opened in these areas,? he said..Bank of Baroda chief MD Mallya said he was planning to open 200 branches in the tier-3 and tier 4 cities over a period of six months. ?This will include the total number of 368 branches we are planning to open during next fiscal,? he said.
Out of the 90 branches that UCO bank was likely to open within the next one year, 53 would be opened in tier 3 and tier 4 cities alone, said CMD SK Goel. ?RBI?s new guidelines is all set to help a bank like ours to have stronger penetration in the rural parts of the country,? he added.
In its half yearly review of the annual monetary and credit policy announced in October, the central bank had liberalised the branch authorisation policy for domestic scheduled commercial banks. Under the liberalised policy, domestic scheduled commercial banks are free to open branches in tier 3 to tier 6 centres as identified in Census 2001 (with a population of up to 50,000) under general permission, RBI had said. Opening of branches by in tier 1 and tier 2 centres (with population of over 50,000) will, however, continue to require prior authorisation, it added. Expansion plans of foreign banks will also continue to be regulated.