RBI has planned to offer incentive to banks opening branches in rural areas

By Pradeep Yuvaraj | June 1, 2011

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.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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