Banking regulator Reserve Bank of India has eased up regulations for opening new branches in the North East. The apex bank has indicated that no prior approval would be needed by banks to set up branches in the region. The declaration was made by a senior Tripura minister.
Despite regular efforts by RBI to convince banks to set up more branches in north east, the penetration level has remained significantly low. The apex bank had earlier acted to increase coin flow in the region too. The decision came in a meeting which was conducted between RBI Governor D Subbarao and Tripura's Finance Minister Badal Choudhury.
"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.
"The RBI governor expressed discontent after learning that banks in some places in the North-East region have been providing banking services through business facilitators and business correspondents instead of setting up of bank branches," the minister added.
"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.