What changed
Previously, banks could apply for branch openings anytime during the year. Now, RBI requires annual applications by December, based on a board-approved three-year mid-term corporate plan covering all branch types, including ATMs and extension counters, with district-wise and population-group details.
What it means for you
Banks need to align branch expansion with long-term strategy and developmental priorities, especially in underbanked areas. This shift encourages more structured planning and may slow ad-hoc openings, but offers incentives for rural and semi-urban expansion through weightage in approvals.
What you must do
- Formulate a board-approved three-year mid-term corporate plan for branch expansion covering all customer-contact offices.
- Prepare district-wise proposals with population-group breakdowns (Metropolitan/Urban/Semi-Urban/Rural) for annual submission by December.
- For 2005-06, submit the expansion plan at the earliest, including upgradation of extension counters and conversion of specialised branches.
- Prioritise underbanked districts/states from RBI's list to gain weightage in approval.
Who it affects
All Indian scheduled commercial banks (excluding RRBs), Bank boards and senior management responsible for branch strategy, Branch expansion and planning teams
What is the deadline for submitting the annual branch expansion plan?
The plan must be submitted to RBI by December every year. For the current year 2005-06, submit at the earliest.
Does the plan need to include ATMs and extension counters?
Yes, the plan should cover all categories of customer-contact offices, including specialised branches, extension counters, and ATMs.
How does RBI incentivise opening branches in underbanked areas?
RBI provides a list of underbanked districts/states and gives weightage to proposals that include branches in these areas.