What is in news?
The Reserve Bank of India (RBI) on 18th may 2017 mandated that 25 per cent of the total number of ‘banking outlets’ opened during a financial year should be located in unbanked rural centres.
The RBI mandated this in its notification — “Rationalisation of Branch Authorisation Policy- Revision of Guidelines” — issued on 18th may 2017.
“Domestic scheduled commercial banks (other than RRBs) are permitted to open, unless otherwise specifically restricted, banking outlets in tier 1 to tier 6 centres without having the need to take permission from RBI in each case
Highlights of RBI’s Policy:
1.RBI has widened the role of bank boards, making them responsible for complying with the new guidelines
2.The RBI removed the restriction on tier-I branches, which was earlier linked to the number of branches opened in the unbanked areas.
3.RBI has also changed the definition of what constitutes a branch. As against the earlier definition of considering all the outlets including extension counters and ATMs as a ‘branch’, the new provisions have changed the nomenclature to calling it as a ‘banking outlet’.
4.There will be a ‘banking outlet’ which will be open for minimum four hours a day and five day a week
5.There is scope for a part-time banking outlet which will be a fixed point service unit but not comply with working hours requirement.
6.The RBI had constituted an internal working group before coming out with the draft guidelines
The Reserve Bank of India (RBI) is India’s central banking institution, which controls the monetary policy of the Indian rupee.
It commenced its operations on 1 April 1935 during the British Rule in accordance with the provisions of the Reserve Bank of India Act, 1934.
The original share capital was divided into shares of 100 each fully paid, which were initially owned entirely by private shareholders.Following India’s independence on 15 August 1947, the RBI was nationalised on 1 January 1949.
The RBI plays an important part in the Development Strategy of the Government of India.
It is a member bank of the Asian Clearing Union.
The general superintendence and direction of the RBI is entrusted with the 21-member Central Board of Directors: the Governor, 4 Deputy Governors, 2 Finance Ministry representatives, 10 government-nominated directors to represent important elements of India’s economy, and 4 directors to represent local boards headquartered at Mumbai, Kolkata, Chennai and New Delhi. Each of these local boards consists of 5 members who represent regional interests, the interests of co-operative and indigenous banks.
A Central Bank is an independent apex monetary authority which regulates banks and provides important financial services like storing of foreign exchange reserves, control of inflation, monetary policy report.
The bank is also active in promoting financial inclusion policy and is a leading member of the Alliance for Financial Inclusion (AFI).
The bank is often referred to by the name Mint Street.