What changed
RBI issued a new master circular consolidating all instructions on branch expansion and operational changes for UCBs up to June 30, 2008. It supersedes the previous master circular from September 1, 2004. The circular covers area of operation limits, branch authorisation policy, extension counters, ATMs, and shifting/splitting/closure of offices.
What it means for you
UCBs must now follow updated consolidated norms for expanding their area of operation, opening branches, setting up ATMs, and shifting or closing offices. Non-compliance, such as opening a branch without RBI authorisation, is a violation of Section 23 and may attract penal action. Banks need to align their business plans with these guidelines.
What you must do
- Review the consolidated master circular and update internal policies for branch expansion and office changes.
- Ensure all new branch openings, ATM installations, and office shifts have prior RBI authorisation where required.
- Submit quarterly branch banking statistics and other returns as specified in the circular.
- Verify that Board resolutions are passed for any planned branch or ATM openings as per Annex IV and V.
Who it affects
Primary (Urban) Co-operative Banks, Salary Earners' Banks, RBI regional offices handling UCB supervision
What is the key change in this master circular?
It consolidates all existing instructions on area of operation, branch authorisation, extension counters, ATMs, and office shifting/closure for UCBs as of June 30, 2008, replacing the 2004 master circular.
What happens if a UCB opens a branch without RBI authorisation?
Opening a branch without RBI authorisation is a violation of Section 23 of the Banking Regulation Act, and the circular specifies penal action for such non-compliance.
Are there specific norms for Grade III/IV UCBs?
Yes, the circular includes separate provisions for UCBs categorised as Grade III/IV regarding shifting, acquisition, and surrender of leased premises.