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To increase banking penetration and financial inclusion drive, the Reserve Bank of India (RBI) has asked banks to expand their branches in unbanked rural centres and draw up their next Financial Inclusion Plan (FIP) for the period 2013-16.
“To facilitate speedier branch expansion in unbanked rural centres for ensuring seamless roll out of the Direct Benefit Transfer/EBT Scheme of the government, banks are advised that they may consider front-loading (prioritising) the opening of branches in unbanked rural centres over a three-year cycle co-terminus with their FIP(2013-16),” RBI said.
RBI said credit will be given for the branches opened in unbanked rural centres in excess of the required 25 per cent of the Annual Branch Expansion Plan (ABEP) for the year which will be carried forward for achieving the criteria in the subsequent ABEP/year of the FIP, it added. At present banks are required to allocate at least 25 per cent of the total number of branches proposed to be opened during a year in unbanked rural (Tier-V and Tier-VI) centres while preparing their ABEP.
Branch expansion in rural areas is essential to address the existing asymmetries in achieving financial inclusion. The DBT scheme covers benefits like scholarships, pensions, NREGA wages directly to the bank or Post Office accounts of identified beneficiaries.
The scheme will cover 20 districts to cover LPG cylinder subsidy from June 1 or before. While rest of the country will be included under LPG subsidy from October 1.
