What changed
RBI introduced clear eligibility norms for UCBs to set up ATMs: minimum deposits of Rs 100 crore, prescribed CRAR, net NPA less than 10%, and consistent profitability with CRR/SLR compliance. Scheduled UCBs not classified as Grade II to IV no longer need prior RBI approval for on-site ATMs. The requirement for prior RBI approval to share or interlink ATMs with other banks has been dispensed with, allowing UCBs to decide on their own.
What it means for you
This circular expands ATM access for UCBs, enabling them to compete better with commercial banks. The relaxed norms reduce regulatory hurdles, especially for well-performing UCBs, allowing faster deployment of ATMs. The removal of prior approval for ATM sharing encourages network connectivity and cost-sharing, potentially lowering operational costs. Banks must ensure they meet the eligibility criteria and apply to the relevant Regional Office for ATMs.
What you must do
- Verify your bank meets the eligibility norms: deposits ≥ Rs 100 crore, CRAR compliance, net NPA < 10%, and consistent profitability with CRR/SLR compliance.
- For scheduled UCBs not classified as Grade II to IV, set up on-site ATMs without prior RBI approval; for others, apply to the Regional Office using the prescribed format.
- Ensure off-site ATMs are installed only within your area of operation; seek prior RBI approval for any shifting or relocation.
- If issuing ATM-cum-Debit Cards, ensure compliance with all applicable guidelines.
- Review your ATM sharing agreements; you may now proceed without prior RBI approval.
Who it affects
All Primary (Urban) Co-operative Banks (UCBs), Scheduled and non-scheduled UCBs, Regional Offices of RBI
What are the eligibility norms for a UCB to set up an ATM under this circular?
A UCB must have minimum deposits of Rs 100 crore, comply with prescribed CRAR, have net NPA less than 10%, and show consistent profitability with no default in CRR/SLR.
Do all UCBs need prior RBI approval for on-site ATMs?
No. Scheduled UCBs that are not classified as Grade II to IV can set up on-site ATMs without prior RBI approval. Others must apply to the Regional Office.
Can UCBs now share their ATMs with other banks without RBI approval?
Yes. The circular removes the requirement for prior RBI approval for network connectivity and/or sharing of ATMs. UCBs can decide on their own.