According to a recent press report, the central bank of the country, the RBI, has announced that for each branch proposed to be opened in Tier 3 to Tier 6 centres of under-banked districts of under-banked States, a bank will get authorization to open a branch in a Tier 1 or Tier 2 centre.
The incentive has been announced because of the need for opening more branches in these States for ensuring more uniform spatial distribution. In addition to this the Reserve Bank of India also requires banks to open at least 25 per cent of the branches under the annual branch expansion plan in un-banked rural centres. The branches are to offers banking services and avail loans like home loan, agricultural loan and other advances to promote rural areas of the country.
The RBI notification said that instead of this it would now not be compulsory to open at least a third of the total number of branches proposed to be opened in Tier 3 to Tier 6 centres of under-banked States.
Reports also said that the authorization for branches in Tier 1 and Tier 2 centres will now help the RBI to monitor whether at least 25 per cent of the total number of branches to be opened during a year is proposed to be opened in un-banked rural centres.