What changed
Previously, UCBs needed prior RBI approval and had to meet eligibility norms including a minimum deposit of Rs.100 crore to open on-site ATMs. Now, UCBs registered in states with an MoU with RBI or under the Multi-State Cooperative Societies Act, 2002, and classified in Grades other than III and IV, can set up on-site ATMs without prior approval. The earlier deposit criterion has been dispensed with for these eligible banks.
What it means for you
This move reduces regulatory burden for financially sound UCBs, allowing faster ATM deployment at their branches. It encourages better customer service and digital access, especially in states cooperating with RBI. Banks must ensure they meet the grade and registration criteria to avail this benefit.
What you must do
- Verify your UCB's registration status (MoU state or multi-state) and current RBI grade classification.
- Ensure your bank is not in Grade III or IV before proceeding with on-site ATM installation without approval.
- Document compliance with the liberalized norms for internal audit and regulatory reference.
- Update your board-approved ATM policy to reflect the new eligibility criteria.
Who it affects
Primary (Urban) Co-operative Banks (UCBs), UCBs registered in states with MoU with RBI, Multi-state UCBs under the Multi-State Cooperative Societies Act, 2002, UCBs classified in Grades other than III and IV
Which UCBs are eligible for this liberalized on-site ATM norm?
UCBs registered in states that have signed an MoU with RBI, or those registered under the Multi-State Cooperative Societies Act, 2002, and classified in Grades other than III and IV, are eligible.
Do eligible UCBs still need RBI approval for on-site ATMs?
No, eligible UCBs can set up on-site ATMs without prior RBI approval under this circular.
What was the earlier minimum deposit requirement for on-site ATMs?
Earlier, UCBs needed a minimum deposit of Rs.100 crore to open on-site ATMs. This requirement has been removed for eligible banks.