Onus on pvt banks to move North-East

Private sector banks may have to follow a mandated branch expansion policy in the North-Eastern states.This is one of the recommendations of a committee set up by the RBI to draw up plans for development of banking sector in the region.

The panel has suggested that more branches should be opened in the North-East till the region comes on par with the rest of India in terms of population per branch.

Regional rural banks should also follow a similar branch expansion policy, the panel noted. Branch expansion should be implemented in phases and by March 2007, 25-30 new branches should be opened in the region, the committee said.

Banking facilities in the region would be expanded either by setting up new branches or through computerisation of the existing banks.

The average population per branch in the North-East is about 20,000 people as against the average of 14,000 people for the rest of the country.

While the new branches will be mostly opened in state capitals and semi-urban areas, the interiors will be served by post offices and non-government organisations which could act as banking facilitators, according to the committee's report.

The committee has also recommended a plan for restructuring the currency management system for the region which faces difficulties in currency transportation owing to the difficult terrain and safety concerns.

The suggestions include use of bigger currency chests and employing helicopters to ferry currency rather than depending solely on the army.