UCB Branch Licensing Liberalised: Annual Business Plan Route

RBI/2007-08/367 UBD.CO.LS.Cir.No. 52 /07.01.000/2007-08 June 16, 2008 All Primary (Urban) Cooperative Banks Dear Sir/Madam Annual Policy Statement for the year 2008-09- Branch licensing norms for Primary (Urban) Cooperative banks-Liberalisation Please refer to para 211 of the Annual Policy Statement 2008-09 (copy enclosed) in terms of which, it has been decided to liberalise and rationalise the branch licensing norms for well managed and financially sound Primary (Urban) Cooperative Banks (UCBs) in the States that have signed MoUs with the Reserve Bank and those registered under the Multi-State Cooperative Societies Act, 2002. 2. Accordingly, the instructions/guidelines contained in Master circular UBD.BL(PCB)MC.No.9/07.01.000/2004-05 dated September 1, 2004 and circular UBD.CO.LS.Cir.No.01/07.01.000/2007-08 dated July 4, 2007 have been reviewed and it has been decided that approvals for branch expansion including off site ATMs in respect of such UCBs will henceforth be considered based on their Annual Business Plans, subject to: i)  Maintenance of a minimum CRAR of 10% on a continuous basis with minimum owned funds commensurate with entry point capital norms for the centre where branch is proposed ii)   Net NPAs being less than 10% iii)  No default in the maintenance of CRR/SLR during the preceding financial year iv)  Net profit in the immediate preceding financial year and v) Regulatory comfort based on inter alia, track record of compliance with the provisions of Banking Regulation Act, 1949 (AACS), RBI Act, 1934 and the instructions/directions issued by RBI from time to time.  3.   UCBs, satisfying the above mentioned norms may prepare an Annual Business Plan (ABP) for opening of branches/extension counters, upgradation of extension counters into full-fledged branches, setting up of new off site Automated Teller Machines, in their existing area of operation , for the next 12 months, with the approval of their Board of Directors and submit the ABP, in duplicate, along with Annexes I , Annex II, AnnexIII A, AnnexIII B and AnnexIV to the respective Regional Offices of Reserve Bank of India.  For the year 2008-09, the Annual Business Plan may be submitted to RBI preferably by September 2008.  From the year 2009-10 onwards, the plan may be submitted preferably by end of December of the previous financial year.  4.  All other instructions on selection of centres, approval of centres, licence and its validity period, procedural guidelines for permission to open branches, norms for opening extension counters and licensing policy for Salary Earners' banks contained in our Master circular dated September 1, 2004 remain unchanged.   Yours faithfully (A.K. Khound) Chief General Manager-in-Charge Annual Policy Statement for the year 2008-09 c) Branch Licensing Norms: Liberalisation As proposed in the Annual Policy Statement of April 2007, well-managed and financially sound UCBs in States that have signed MoUs with the Reserve Bank and those registered under the Multi-State Cooperative Societies Act, 2002 were permitted to open branches and extension counters subject to fulfilling certain eligibility criteria.  With a view to liberalising and rationalizing the branch licensing norms for such UCBs, it is proposed: to consider approvals for branch expansion, including off-site ATMs, based on annual business plans, subject to maintenance of minimum CRAR of 10 per cent on a continuing basis and other regulatory comfort. ANNEX I 1.   Name and address of the bank 2.   Licence No. and date of licence 3.  Area of Operation (as approved by RBI) 4.  Whether bank has an elected Board of Directors? 5.   If so, whether there are two professional directors? 6.   No. of existing branches (List of branches to be annexed), their location and the population of the centre where the branch is located as per latest census 7.   No. of existing extension counters (List to be annexed) with address 8.  No. of existing Off Site ATMs (List to be annexed) with address 9.  Whether there were / are any default in CRR/SLR (If yes, give details and the reasons for the same) ANNEX II Financial Position as per audited balance sheet (latest) (Rs. lakhs) Name of the bank: Sl.No.

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-08/367 · issued 16 Jun 2008. The plain-English explanation above is BankPulse’s own independent summary.

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