Microfinance

Banks can open mobile branches without RBI approval

Banks are expected to compete with microfinance institutions through their mobile branches and bring about greater financial inclusion in India.

In a major step toward accelerating the financial inclusion of the unbanked and poorer sections of society, the Reserve Bank of India has allowed commercial banks to open mobile branches without its approval in areas with less than 50,000 population .This move is expected to increase the number of mobile bank branches in the country as banks seek to expand in rural areas.

The Reserve Bank of India has also decided to liberalise the branch authorisation policy and grant general permission to domestic scheduled commercial banks to operationalise mobile branches in tier 3 to tier 6 centres. Tier 3 to Tier 6 cities are those cities with a population of upto 49,999 as per Census 2001.This move is expected to take banking services to unbanked areas and help promote financial inclusion in India.rbi mobile bank branch

The mobile branch scheme consists of the extension of banking facilities through a well protected mobile van with arrangements for three or four bank officials of the bank sitting in it with books, safe containing cash and accepting deposits the release said.

The mobile branch would visit the places proposed to be served by it on specific days. However, it should not visit the villages or centres which are served by co-operative banks and places served by regular branch of commercial banks, the central bank added.

The Reserve Bank of India has issued other guidelines that the mobile branch should be stationed in each location for a reasonable time on specified days and specified hours, so that its services could be utilised properly by customers.The notification also added that the business transacted at the mobile branch shall be recorded in the books of the base branch or data centre.

Further the RBI has also notified that scheduled commercial banks may operate mobile ATMs at places identified by them, without prior permission from the Reserve Bank of India.

Abhay N

Author : 

Abhay is the founder and managing editor of India Microfinance. He is passionate about microfinance, financial inclusion and social entrepreneurship in India.

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