What changed
Banks are now advised to front-load branch openings in unbanked rural centres over a 3-year cycle co-terminus with their Financial Inclusion Plan (FIP) 2013-16. The existing 25% allocation requirement in ABEP for unbanked rural centres continues, but any excess branches opened beyond this threshold can be carried forward to the next year of the FIP.
What it means for you
This directive accelerates rural branch expansion to support Direct Benefit Transfer (DBT) and Electronic Benefit Transfer (EBT) schemes. Banks can now strategically plan branch openings across three years, gaining credit for early overachievement. It reduces pressure to meet the 25% target annually, allowing flexibility while deepening financial inclusion in underserved areas.
What you must do
- Review your ABEP to ensure at least 25% of proposed branches are in unbanked rural (Tier 5/6) centres.
- Front-load branch openings in unbanked rural centres over the FIP 2013-16 cycle, prioritising early years.
- Track excess branches opened beyond the 25% threshold and carry forward the credit to subsequent ABEP years.
- Align branch expansion plans with DBT/EBT rollout requirements for seamless government benefit transfers.
Who it affects
All Domestic Scheduled Commercial Banks (excluding RRBs), Branch expansion planning teams, Financial inclusion and rural banking departments
What is the definition of an unbanked rural centre?
An unbanked rural centre is a rural (Tier 5 or Tier 6) centre that does not have a brick-and-mortar branch of any scheduled commercial bank for customer banking transactions.
Can we carry forward excess branches opened in unbanked rural centres?
Yes, if you open more than 25% of your ABEP branches in unbanked rural centres in a given year, the excess can be carried forward to meet the requirement in the subsequent year of the FIP.
Does this circular change the existing 25% allocation requirement?
No, the requirement to allocate at least 25% of total branches in ABEP to unbanked rural centres remains. The new flexibility is about front-loading and carry-forward of excess branches.