Master Circular on Branch Licensing

RBI Master Circular Link

Branch Licensing Policy

The Reserve Bank of India (RBI) has outlined a comprehensive policy for branch licensing, covering various aspects of branch operations.

Opening of Branches: Branches can be opened at rural, urban, metropolitan, and semi-urban centers, subject to certain conditions.

Shifting of Branches: Branches can be shifted from one location to another, with prior approval from the RBI.

Conversion of Branches: Branches can be converted from one type to another, such as from a rural branch to an urban branch.

Miscellaneous Provisions:

Extension counters, satellite offices, mobile offices, and automated teller machines (ATMs) can be set up, subject to certain conditions.

Service branches, central processing centers, and back offices can be established to support banking operations.

Regional offices can be set up to oversee banking operations in a particular region.

Business Facilitator / Business Correspondent Model:

Eligible individuals and entities can be engaged as business correspondents (BCs) to provide banking services in underserved areas.

BCs are required to follow certain guidelines, including know-your-customer (KYC) norms, customer confidentiality, and information technology standards.

BCs can perform certain transactions, and are entitled to receive commissions or fees for their services.

Internal Control and Monitoring:

Banks are required to have in place internal control and monitoring mechanisms to ensure compliance with RBI guidelines.

Consumer protection measures and grievance redressal mechanisms are also mandatory.

Chat with the Master Circular:

Download: Master Circular on Branch Licensing

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