Later an internal working group was set up, which came out with the draft report in October 2016. The key focus of the recommendations was to facilitate financial inclusion by ensuring availability of banking services in all centers through low-cost delivery channels.
The revised policy has also allowed small finance banks three years from the date of commencement of business to align their banking network with the extant guidelines. Till such time, the existing structures may continue and would be treated as “banking outlets” though not immediately reckoning for the 25% norm. “Nevertheless, during this period of three years, for all the banking outlets opened or converted from the existing MFI branches in a year, they will have to open 25% banking outlets in unbanked rural centres in the same year,” RBI said.
“This policy will help in further penetration in rural areas and increase the profitability of the organization. We expect 10-15% more growth in the business with same set of branches we have projected,” said Munish Jain, chief operating officer of Capital Small Finance Bank.
News Source- Live Mint