What changed
A new part E in Chapter V of the Directions now permits banks to run branches from temporary premises for up to 30 days by merely informing the RBI Regional Office, with specific approval needed beyond that. Banks must restore ATMs quickly and provide alternative cash arrangements. They can also open small accounts for displaced persons lacking ID, and offer fee waivers or reductions for up to one year at their discretion.
What it means for you
Banks now have clearer operational flexibility during calamities, reducing the need for prior approvals for temporary branches and enabling faster service restoration. This allows lenders to respond more swiftly to customer needs in disaster-hit areas, potentially lowering reputational and operational risks. The fee waiver option gives banks a tool to support affected customers without regulatory hurdles, but they must balance this with financial prudence.
What you must do
- Update internal policies to allow temporary branch operations with just an advice to RBI Regional Office for up to 30 days.
- Establish protocols for rapid ATM restoration and alternative cash arrangements in calamity zones.
- Train staff on opening small accounts under KYC Directions for displaced persons lacking ID.
- Prepare a discretionary framework for fee waivers/reductions in declared calamity areas, capped at one year.
- Coordinate with RBI Regional Offices for approvals if temporary premises are needed beyond 30 days.
Who it affects
Commercial banks operating in India, Branch managers in calamity-prone regions, Compliance and operations teams, Customers in areas affected by natural disasters
Can we operate a branch from temporary premises without prior RBI approval?
Yes, for up to 30 days, you only need to advise the concerned RBI Regional Office. Beyond 30 days, specific approval is required.
What relief measures can we offer to customers in calamity areas?
At your discretion, you may waive or reduce various fees and charges for customers in declared calamity areas, but this relief cannot exceed one year.
How should we handle customers who lost their ID documents in a calamity?
You can open small accounts as per the KYC Directions, 2025, which have relaxed documentation requirements for such cases.