No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2012-13/158 · issued 01 Aug 2012 · ~2 min read
Quick answerRBI now allows Regional Rural Banks to open branches in Tier 2 centres (population 50,000-99,999) without prior approval, subject to conditions: CRAR ≥9%, net NPA <5%, no CRR/SLR default, net profit, and CBS compliance. Reporting within 15 days post-quarter is mandatory.
What changed
Earlier, RRBs could open branches in Tier 3 to 6 centres without prior RBI permission. Now, this automatic route is extended to Tier 2 centres (population 50,000-99,999 as per Census 2001). RRBs meeting specified financial and operational conditions can open branches in Tier 2 centres without seeking prior RBI approval, only reporting post-facto.
What it means for you
This relaxation significantly reduces the regulatory burden for well-performing RRBs, enabling faster branch expansion in semi-urban areas. It supports financial inclusion by easing access to banking in Tier 2 centres. Banks must ensure they meet the eligibility criteria and submit quarterly reports to the concerned RBI Regional Office within a fortnight of quarter-end.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Verify your RRB meets all conditions: CRAR ≥9%, net NPA <5%, no CRR/SLR default in last year, net profit in last financial year, and CBS compliance.
Open branches in Tier 2 centres without prior RBI approval, but maintain records for post-facto reporting.
Submit a quarterly report within 15 days of quarter-end to the concerned RBI Regional Office using the format from circular RPCD.CO.RRB.BC.No.56/03.05.90A/2011-12 dated March 29, 2011.
Apply to the RBI Regional Office for post-facto automatic issue of branch licence and display it at the branch premises.
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What are the eligibility conditions for RRBs to open branches in Tier 2 centres without prior permission?
RRBs must have CRAR of at least 9%, net NPA less than 5%, no default in CRR/SLR for the last year, net profit in the last financial year, and be CBS compliant as per the latest inspection report.
Do RRBs still need RBI permission for Tier 1 centres?
Yes, opening branches in Tier 1 centres (population 100,000 and above as per Census 2001) continues to require prior permission from RBI.
What reporting is required after opening branches in Tier 2 centres?
A report with details of branches opened in Tier 2 to 6 centres must be submitted within a fortnight of the end of the quarter to the concerned RBI Regional Office, using the format from the March 29, 2011 circular.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/158
RPCD.CO.RRB.BL.BC.No. 19/03.05.90/2012-13
August 1, 2012
All Regional Rural Banks
Dear Sir,
Relaxation in Branch Licensing Policy - Tier 2 Centres
Please refer to our circular RPCD.CO.RRB.BC.No.28/03.05.90-A/2011-12 dated November 18, 2010 , permitting Regional Rural Banks (RRBs) to open branches in Tier 3 to Tier 6 centres (with population up to 49,999 as per Census 2001), without having the need to take permission from Reserve Bank of India in each case, subject to reporting, provided they fulfil certain conditions.
2. In order to enhance the penetration of banking services in Tier 2 centres it has been decided to allow RRBs to open branches in Tier 2 centres on par with the policy for Tier 3 to 6 centres.
3. Accordingly, RRBs will be allowed to open branches in Tier 2 centres (with population of 50,000 to 99,999 as per Census 2001) without the need to take permission from the Reserve Bank in each case, subject to reporting, provided they fulfil the following conditions, as per the latest inspection report:
CRAR of at least 9%; Net NPA less than 5%; No default in CRR / SLR for the last year; Net profit in the last financial year; CBS compliant. 4. RRBs not fulfilling the conditions stated at paragraph 3 will have to continue to approach RBI / NABARD, as hitherto. Opening of branches by RRBs in Tier 1 centres (centres with population of 100,000 and above as per Census 2001) will also continue to require prior permission of Reserve Bank of India.
5. A report on the details of the branches opened in Tier 2 to 6 centres should be submitted, within a fortnight of the end of the quarter, in the format contained in our circular RPCD.CO.RRB.BC.No.56 / 03.05.90A / 2011-12 dated March 29, 2011 , to the concerned Regional Office of RBI. RRBs may approach the Regional Office of RBI for, post-facto, automatic issue of the licence/s. The licence should be displayed in the premises of the branch so opened for information of its customers / public to instil confidence in them that the branch is authorized to conduct banking business.
6. All other instructions remain unchanged.
7. Please acknowledge receipt to our respective Regional Office.
Yours faithfully,
(C.D.Srinivasan)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/158 · issued 01 Aug 2012. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7490&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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