The Reserve Bank of India (RBI) has eased rules on establishing offsite ATMs for strong urban co-operative banks with robust corporate governance.
From now on, banks with lower bad loans, 3 successive years of profit and experts on their board, do not have to take prior authorization from RBI for off-site ATM. Earlier, no UCB could establish an off-site ATM without regulatory approval.
Besides the profit condition, RBI has asked banks have to keep their net non-performing assets below 5% and have minimum 2 professionals on their board to be approved to establish ATMs without authorization.
Also a bank would also be ineligible if it has ever failed to fulfill its cash reserve ratio or mandatory liquidity ratio condition, or if it’s capital adequacy ratio was lesser than 10% in the earlier year.
As per the new guidelines, RBI has also said authorization is subject to statutory ease on topics such as past record of complying with the requirements of Banking Regulation Act, 1949, RBI Act, 1934, and the guidelines or directives given by RBI regularly.
A senior official from a UCB said, “The only liberalisation is that if an UCB is eligible as per new norms, it does not have to seek prior approval from RBI to set up offsite ATMs.”
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