No RBI approval needed for bank branches in northeast: minister

Thursday, December 30, 2010

AGARTALA - The Reserve Bank of India (RBI) has relaxed norms for setting up bank branches in northeast India and no prior approval of the apex regulatory body is required in this regard, a senior Tripura minister said Thursday.

The clarification came during a meeting between RBI Governor D. Subbarao and Tripura’s Finance Minister Badal Choudhury in Mumbai Wednesday. Worry was expressed over the gradual fall in the credit-to-deposit ratio in the region.

“Any commercial and nationalised banks can set up branches anywhere in northeast India without prior sanction of the RBI. The bank authorities can independently set up their branches in the region,” Choudhury said in a statement.

“The RBI governor expressed discontent after learning that banks in some places in the northeast region have been providing banking services through business facilitators and business correspondents instead of setting up of bank branches,” the minister added.

According to him, the RBI governor has told him that the central bank would take stern actions against the unauthorised non-banking finance companies collecting money from people.

“Governor Subbarao said non-banking finance companies not recognised by the RBI, the Insurance Regulatory Development Authority or the Securities and Exchange Board of India cannot do any monetary business or take deposits,” said the minister’s statement.

“The Tripura government has undertaken an inquiry against the 84 non-banking finance companies in Tripura alone. The government has also sought advice from the RBI and the (federal) finance ministry about the state’s possible steps,” Choudhury stated.

The RBI chief assured to look into issues such as non-availability of currency chests in most of the bank branches, crisis of small-denomination coins and setting up of pension processing centres with the nationalised banks.

“RBI has decided to open its sub-offices in six northeastern states, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura and Meghalaya, in a phased manner,” the minister added.

Filed under: Economy

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