Opening of No Frills Accounts for Rural Customers

Press Information Bureau

Government of India

Ministry of Finance

22-May-2012 19:31 IST

There are 93,659 branches of Scheduled Commercial Banks (SCBs) functioning in the country as on 31st March, 2012 out of which 34,671 branches are in rural areas and 24,133 are in semi-urban areas, which together constitute about 63 per cent of the total bank branches.

As per the extant Branch Authorization Policy of Reserve Bank of India (RBI), general permission has been granted to domestic SCBs (other than Regional Rural Banks) to open branches, in centres with a population up to 99,999 and in all centres of the North-Eastern States and Sikkim, subject to reporting. In order to further expand the banking network, RBI has advised that while preparing their Annual Branch Expansion Plan, the banks should allocate at least 25 per cent of the branches proposed to be opened during a year in unbanked rural centres with population upto 9999. Further, under the “Swabhimaan” financial inclusion campaign, banking facilities have been provided to over 74,000 villages having population over 2000.

With a view of achieve the objective of greater financial inclusion, the Reserve Bank of India (RBI) issued instructions to all Scheduled Commercial Banks in November 2005, to make available a basic banking ‘no-frills’ account either with ‘nil’ or very low minimum balances as well as charges that would make such accounts accessible to vast sections of population. As per RBI, the number of no-frills accounts outstanding with Public Sector Banks (excluding Regional Rural Banks) and Private Sector Banks at end of March 2012, is 1032.06 lakhs.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Rajya Sabha today.

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