What changed
Previously, DCCBs needed RBI approval for all new places of business and ATMs. Now, eligible DCCBs can apply for branch openings via a streamlined process to the RBI Regional Office, with NABARD's recommendation. On-site ATMs need no approval; off-site/mobile ATMs require board approval and post-installation reporting within 15 days.
What it means for you
This reduces regulatory burden for well-performing DCCBs, enabling faster expansion and better customer reach. Banks must ensure strict compliance with eligibility criteria, as any default or penalty could block approvals. The shift to post-facto reporting for ATMs demands robust internal controls and timely submissions to avoid non-compliance.
What you must do
- Verify your DCCB meets all eligibility criteria: 3 years licensed, CRAR ≥9%, net NPA <5%, profit in last 2 years, no CRR/SLR default, no penalties or specific directions in last 2 years.
- For branch openings, submit applications in prescribed format to RBI Regional Office with a copy to NABARD for their recommendation.
- For off-site/mobile ATMs, obtain board approval, install, and report to RBI Regional Office within 15 days using Annex II/III formats.
- Ensure all ATMs comply with RBI security guidelines from circulars dated April 12, 2018 and June 14, 2019.
- Maintain a good regulatory compliance track record to avoid disqualification from future approvals.
Who it affects
All District Central Co-operative Banks (DCCBs), NABARD (as recommending authority), RBI Regional Offices (processing applications)
Can a DCCB with net NPA above 5% apply for new branches?
No, the criteria require net NPA to be less than 5% as per the latest NABARD inspection report. Banks not meeting this must first improve asset quality.
Do DCCBs need RBI approval for on-site ATMs?
No, on-site ATMs can be installed without prior RBI approval. However, off-site/mobile ATMs require board approval and must be reported to RBI within 15 days of operationalization.
What happens if a DCCB had a monetary penalty in the last two years?
Such banks are not eligible to apply under these guidelines. They must wait until two years after the penalty to become eligible, assuming no further violations.