Tuesday, November 20, 2012

Banks can open administrative office in large cities sans RBI permission

Banks need not seek permission of the Reserve Bank to open administrative offices in large cities (Tier-I), the central bank said today.

“With a view to further increasing operational flexibility of banks, it has been decided to permit domestic scheduled commercial banks (other than RRBs) to open offices exclusively performing administrative and controlling functions in Tier-I centres without the need to obtain prior permission,” it said in notification today.
Currently, banks (excluding RRBs) are permitted to open branches in Tier-II to Tier-VI centres (with population less than 1,00,000) and in rural, semi-urban and urban centres in north-eastern states and Sikkim without seeking its permission.
In its second quarter Monetary Policy 2012-13 in mid-October, the RBI had proposed to permit banks to open offices in Tier-I centres as well.
The RBI, however, said permission granted would be subject to regulatory and supervisory comfort and it would have the option to withhold permissions granted on a case-to-case basis.
Though, the apex bank made it clear that opening of branches including Central Processing Centres (CPCs)/ Service Branches by banks in tier I centres (with population of 1,00,000 and above) will continue to require its prior permission.

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