What changed
The previous Master Circular dated July 1, 2008 was updated to include instructions issued up to June 30, 2009. The updated circular consolidates all existing guidelines on branch authorisation, including procedures for opening, shifting, merging, and closing branches, as well as setting up off-site ATMs and other facilities.
What it means for you
Banks must follow the updated consolidated guidelines for all branch-related actions, ensuring compliance with Section 23 of the Banking Regulation Act. The circular provides a single reference point for branch authorisation, reducing ambiguity and streamlining regulatory compliance. Foreign banks are specifically guided by paragraph 20 of this circular.
What you must do
- Review the updated Master Circular and ensure your bank's branch expansion plans align with the consolidated guidelines.
- Submit annual branch expansion plans using the prescribed formats (Annex 3D) for underbanked and other districts.
- Follow the specific procedures for shifting, merging, or closing branches, especially for rural branches, as detailed in the circular.
- Ensure off-site ATMs are set up only under the general permission conditions listed in Annex 11.
Who it affects
All commercial banks (excluding RRBs), Local Area Banks, Foreign banks operating in India
What is the purpose of this Master Circular?
It provides a framework of rules, regulations, and procedures for banks to follow when opening, shifting, or closing branches in India, as per Section 23 of the Banking Regulation Act, 1949.
Does this circular apply to foreign banks?
Yes, foreign banks are guided by paragraph 20 of this Master Circular, which contains specific instructions for them.
What are underbanked districts and how are they relevant?
Underbanked districts are listed in Annex 4 of the circular. Banks must submit branch expansion plans with state-wise and population group-wise data for underbanked and other districts, as per Annex 3D.