What changed
Earlier, RRBs could only open extension counters if they were the principal banker to the entity. This circular removes that condition for counters at places of worship and market places. The change is effective from September 4, 2007.
What it means for you
RRBs can now expand their physical presence more flexibly into high-footfall locations like temples, mosques, churches, and local markets. This liberalisation helps RRBs deepen financial inclusion and capture more walk-in business without the earlier principal banker restriction. Banks must still obtain a licence from the RBI Regional Office before operationalising such counters.
What you must do
- Identify suitable places of worship and market places for setting up extension counters.
- Apply for a licence from the concerned RBI Regional Office (RPCD) before opening any counter.
- Ensure compliance with all other extant norms for extension counters as per earlier circulars.
- Update internal policies and procedures to reflect the removal of the principal banker condition for these locations.
Who it affects
Regional Rural Banks (RRBs), RBI Regional Offices (RPCD), Customers in rural and semi-urban areas
Do RRBs still need RBI approval to open these extension counters?
Yes, RRBs must obtain a licence from the concerned Regional Office of RBI (RPCD) before setting up any extension counter at places of worship or market places.
Does the earlier principal banker condition still apply for other types of extension counters?
The circular only removes the principal banker condition for counters at places of worship and market places. For other locations, the earlier condition as per the July 2, 2007 circular may still apply.
What is the effective date of this circular?
The circular was issued on September 4, 2007, and is effective from that date.