Opening of Bank branches in Rural Areas


To promote financial inclusion and to extend the banking network in unbanked areas, general permission has been granted by Reserve Bank of India (RBI) to domestic Scheduled Commercial Banks including Public Sector Banks (excluding Regional Rural Banks) to open branches at any place in the country, without seeking prior approval of RBI in each case, subject to at least 25 percent of the total number of branches opened during a financial year being opened in unbanked rural (Tier 5 and Tier 6) centres (population upto 9999).

RBI has also specified that the total number of branches opened in Tier 1 centres (population 100000 and above) during the financial year cannot exceed the total number of branches opened in Tier 2 to Tier 6 centres (population upto 99999) and all centres in the North Eastern States and Sikkim.

As on 31.03.2016, Scheduled Commercial Banks (SCBs) have 132700 bank branches across the country and out of which 86425 branches (65.12 %) are in rural and semi urban areas.

Opening of bank branches is a commercial decision of the banks taken in accordance with the branch opening policy of RBI and requests for opening a branch by public at a specific place are considered by the banks on merits depending on their viability and requirement of banking facilities in the area.

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