What changed
RBI introduced Ultra Small Branches (USBs) as intermediate brick-and-mortar structures between base branches and BC locations, partially modifying the 2006 guideline that required BC activities away from bank premises. BCs can now operate from USBs. USBs must be managed full-time by bank officers/employees and support about 8-10 BC units within a reasonable distance of 3-4 km.
What it means for you
Banks may invest in setting up or converting BC outlets into USBs with CBS terminals, passbook printers, and cash safes, potentially increasing operational costs but enhancing control. This improves cash management, documentation, grievance redressal, and BC supervision, reducing fraud risks. Banks need to ensure BCs still serve remote areas beyond the USB, not just the branch premises.
What you must do
- Establish Ultra Small Branches (USBs) in rural centres, either new or by converting existing BC outlets, to support about 8-10 BC units within a reasonable distance of 3-4 km.
- Equip USBs with minimum infrastructure: CBS terminal linked to passbook printer and a safe for cash retention.
- Assign full-time bank officers/employees to manage USBs for oversight, cash management, and customer service.
- Ensure BCs operate from USBs but continue to serve entire assigned areas, not limiting to branch premises.
- Conduct periodic visits by base branch officers to USBs and BC locations for supervision.
Who it affects
All Scheduled Commercial Banks (including RRBs), Local Area Banks, Business Correspondents (BCs), Rural customers in villages with population above 2000
What is an Ultra Small Branch (USB) and what infrastructure does it need?
A USB is a low-cost brick-and-mortar structure between a base branch and BC locations, supporting 8-10 BC units within 3-4 km. It must have a CBS terminal linked to a passbook printer and a safe for cash retention, managed full-time by bank staff.
Can Business Correspondents (BCs) operate from Ultra Small Branches?
Yes, BCs can operate from USBs, which increases their legitimacy and customer confidence. However, banks must ensure BCs still serve the entire area, not just the branch premises.
What was the coverage of villages with banking services as of March 2012?
Banks covered 74,199 out of 74,414 villages with population above 2000, achieving 99.7% coverage by March 31, 2012.