RBI Master Circular on RRB Branch Licensing

What changed

RBI issued a master circular consolidating all existing instructions on branch licensing for RRBs, covering opening, shifting, merger, conversion of branches, extension counters, and ATMs. It streamlines the process by requiring RRBs to submit applications to NABARD with an advance copy to RBI, and mandates Board approval before applying. The circular also clarifies that no separate sponsor bank or DCC sub-group approval is needed for new branches, though DCC sub-group approval is still required for shifting, merger, or conversion.

What it means for you

For RRBs, this master circular simplifies compliance by providing a single reference document for all branch licensing rules, reducing ambiguity. The streamlined approval process—via NABARD and Empowered Committees—should speed up decisions on branch expansions and changes. RRBs must ensure they meet eligibility conditions like no SLR/CRR defaults in the last two years before applying for new branches.

What banks were required to do at the time

• Review the master circular and update internal branch licensing policies to align with consolidated instructions.
• Ensure Board approval is obtained before submitting any application for opening, shifting, merger, or conversion of branches.
• Submit branch licensing applications to the respective NABARD Regional Office in Form VI, with an advance copy to RBI's Regional Office.
• Verify that the RRB has not defaulted on SLR/CRR maintenance in the last two years before applying for new branches.
• For shifting, merger, or conversion of branches, secure approval from the sub-group of the District Consultative Committee.

Who it affects

All Regional Rural Banks (RRBs), NABARD Regional Offices, RBI Rural Planning and Credit Department (RPCD), Empowered Committees for RRBs, District Consultative Committees (DCCs)