Please refer to paragraph 151 of the Annual
Policy Statement for the year 2006-07, announced on April 18, 2006 (extract
enclosed).
2. Presently, RRBs are required to submit their
applications for opening, shifting or merger of branches to the Reserve Bank
through the National Bank for Agriculture and Rural Development (NABARD) after
following the prescribed procedure (Cf. our Master Circular RPCD,CO.RRB.No.BL.BC.19/03.05.90-A/
2005-06 dated July 15, 2005).
3. With a view to liberalising and simplifying
the procedure, it has been decided that the Empowered Committees (EC) for RRBs,
constituted by the Reserve Bank at its Regional Offices, would deliberate and
make recommendation on such applications. The Reserve Bank would take into account
the EC's recommendation and dispose of such applications expeditiously. Accordingly,
RRBs may henceforth submit such applications to the respective Regional Offices
of NABARD, with advance copies thereof to the concerned Regional Office of the
Reserve Bank.
4. No separate approval of the sponsor bank
is required to be taken. Further, approval of the sub-group of DCC will also
not be required for opening of branches. However, in case of shifting / merger
of branches, approval of the sub-group of DCC will be required, as hitherto.
5. Similarly, requests from RRBs for conduct
of foreign exchange business, as limited authorised dealers for current account
transactions, would be considered by the Reserve Bank after clearance by the
Empowered Committee. RRBs may, therefore, submit such proposals to our concerned
Regional Office for necessary action.
6. Please acknowledge receipt to our respective
Regional Office.
Yours faithfully,
(C.S.Murthy)
Chief General Manager-In-Charge
Extract of paragraph 151 of the Annual Policy
Statement
'At present, authorisations for opening branches
by RRBs are issued by the Reserve Bank, based on requests received from them
through the NABARD and duly recommended by sponsor banks. In order to liberalise
and simplify the branch licensing policy, it is proposed:
• to permit RRBs to open/shift offices
after obtaining clearance from the Empowered Committees (ECs). Similarly,
requests for conduct of foreign exchange business as limited authorised
dealers (for current account transactions) will be approved on clearance
by the ECs.'