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part of the policy of financial inclusion, the philosophy and the concrete action
programme for this purpose were set out by the RBI’s
High Level Committee
to Review the Lead Bank Scheme
(August 2009), whose recommendations
were duly accepted and incorporated in to policy guidelines. The Committee
recommended that, to begin with, a banking outlet should be made accessible
to each village having population of over 2,000 at least once a week on a regular
basis. The banking services may not necessarily be through a brick and mortar
branch but can be provided through various forms of branchless banking –
mobile banking, extension counters, satellite offices and kiosks – and also
through BCs. To quote Usha Thorat, the Deputy Governor-in-Charge of the
Financial Inclusion Policy in the RBI until recently, and author of the above
High Level Committee: ‘...our preference is to have a bank-led system with non-
bank players as partners and service providers, so that regulatory resources
are focused on banks’ (Usha Thorat 2010).
However, on a review of the banks’ performance in areas of financial
inclusion, the RBI revisited its policy on banks opening brick and mortar
branches. In its
Annual Monetary Policy Statement
of May 3, 2011 for the year
2011-12, the RBI said that while banks have proposed to use BCs in a big way,
the enhanced goal of ‘bringing banking services to identified 72,800 villages by
March 2012 and thereafter progressively to all villages over a period of time,
there is a need for opening of more brick and mortar branches, besides the use
of BCs’ (p.20). Accordingly, in a policy circular issued on July 15, 2011, the RBI
has advised banks that while preparing their annual branch expansion plans,
they should allocate at least 25% of the total number of branches proposed
to be opened during a year in unbanked rural (Tier-5 and Tier-6) centres.
25
An unbanked rural centre would mean a rural (Tier-5 and Tier-6) centre that
does not have a brick and mortar structure of any scheduled commercial bank
for customer-based banking transactions. The bank branches so opened in
unbanked villages may be low cost intermediary kiosks with simple structures,
25
Details of tier-wise classification of centres based on population
(i) Classification of centres(tier-wise) Population (as per 2001 Census)
Tier 1 - 1,00,000 and above
Tier 2 - 50,000 to 99,999
Tier 3 - 20,000 to 49,999
Tier 4 - 10,000 to 19,999
Tier 5 - 5,000 to 9,999
Tier 6 - Less than 5000
(ii) Population-group wise classification of centres
Rural Centre - Population up to 9,999
Semi-urban centre - from 10,000 to 99,999
Urban centre - from 1,00,000 to 9,99,999
Metropolitan centre - 10,00,000 and above
