SLBC convenor banks to identify villages with below 5,000 population for bank branch opening: RBI

State Level Bankers' Committee came into existence under Lead Bank Scheme as per RBI guidelines

Reserve Bank of India (RBI) has advised State Level Bankers' Committee (SLBC) Convenor banks to identify villages with population above 5,000 without a bank branch of a scheduled commercial bank in their state. RBI said identified villages may be allotted among scheduled commercial banks for opening of branches, whose opening should be completed by March 31, 2017.

State Level Bankers' Committee (SLBC) came into existence under Lead Bank Scheme as per RBI guidelines. SLBC is an inter-institutional forum at State level ensuring co-ordination between Government and Banks on matters pertaining to banking development.

In June 2012, SLBC Convenor banks were advised to prepare a roadmap to provide banking services in all unbanked villages with population less than 2000 through a combination of business correspondents (BCs) and branches. They were also asked to ensure that there is a brick and mortar branch to provide support to a cluster of BC units at a reasonable distance of 3-4 kilometers.
 

Later in January 2015 keeping in view the implementation of Pradhan Mantri Jan Dhan Yojana (PMJDY), SLBC Convenor banks and lead banks were asked to complete the process of providing banking services in unbanked villages with population below 2000 by August 14, 2015.

RBI said that coverage of banking services in unbanked villages is skewed towards the BC model and the ratio of branches to BC is very low.

“For increasing banking penetration and financial inclusion, brick and mortar branches are an integral component. Therefore, it has been decided to focus on villages with population above 5,000 without a bank branch of a scheduled commercial bank,” the central bank said.

The banking regulator said that this will also enable banks to provide quality financial services and timely support to BC outlets that would help in sustaining and strengthening the services provided through BCs and also ensure close supervision of BC operations.

These banks have also been asked to accord top priority to this roadmap.