What changed
Previously, UCBs had to include off-site ATM proposals in their Annual Business Plans for RBI approval. Now, well-managed UCBs meeting six conditions—such as 10% CRAR, net NPAs under 5%, no CRR/SLR default, three years of net profit, sound internal controls with two professional directors, and regulatory comfort—can apply directly to their Regional Office without waiting for the annual plan cycle.
What it means for you
This liberalisation reduces bureaucratic delays for compliant UCBs, enabling faster deployment of ATMs to improve customer reach and digital infrastructure. Banks must ensure continuous compliance with the eligibility criteria, as any slippage could invite regulatory scrutiny. The move aligns with RBI's push for financial inclusion and modernisation of cooperative banking.
What you must do
- Verify your bank meets all six eligibility criteria: CRAR ≥10%, net NPAs <5%, no CRR/SLR default in last year, three years of net profit, two professional directors, and sound internal controls.
- Prepare application with Board approval, including Annexes I-IV, and submit in duplicate to your respective RBI Regional Office.
- Ensure all existing instructions on ATM functionality, inter-account transfer, and shared network remain complied with as per Master Circular dated July 1, 2009.
Who it affects
Primary (Urban) Cooperative Banks (UCBs), RBI Regional Offices handling UCB applications, Customers of eligible UCBs seeking better ATM access
What are the key eligibility criteria for UCBs to open off-site ATMs under this liberalised framework?
UCBs must maintain a minimum CRAR of 10% on a continuous basis, have net NPAs below 5%, no default in CRR/SLR during the preceding financial year, continuous net profit for the last three years, a sound internal control system with at least two professional directors on the board, and overall regulatory comfort based on compliance track record.
Do we still need to follow the old Master Circular instructions for ATM operations?
Yes, all other instructions on functional facilities at off-site ATMs, inter-account transfer, telephone connectivity, and shared payment networks remain unchanged as per the Master Circular dated July 1, 2009.