RBI MAY ALLOW BANKS TO DECIDE ON BRANCHES

RBI may de-license or leave it to banks to open branches in rural and semi-urban centres, in a step towards liberalising its branch authorisation policy, according to the report appearing in Business Standard.
f that happens, it will no longer be compulsory for a bank to open branches in rural and semi urban centres to bolster its application to get a licence to open more branches in urban or high-income areas.
Currently, a bank is required to take permission to open branches anywhere. Besides, as an informal code, RBI maintains a ratio of urban centre branches to rural/semi-urban ones . This means a single branch in an urban area will require a certain number of branches to be opened in rural and semi-urban areas.
It is reported that the proposed change forms a part of the recommendations made by the Raghuram Rajan committee on financial sector reforms, towards broadening access to finance.
RBI has already accepted another committee’s recommendations, by freeing banks to establish ATMs without taking its prior permission.
Source: http://www.business-standard.com/india/news/rbi-mulls-allowing-banks-to-decidebranches/374259/