What changed
RBI noted that some states use a 'one district one bank model' for EBT, while FIP allocates unbanked villages with population over 2000 to banks for banking outlets by March 2012. Banks complained about duplicative costs when the same village is allotted under both schemes. RBI now mandates SLBCs to settle such disputes and clarify that FIP allocation does not bar other banks from operating in those villages.
What it means for you
Banks must coordinate via SLBCs to avoid redundant infrastructure costs in villages covered by both EBT and FIP. The FIP roadmap requires at least one banking outlet offering savings, credit, remittance, and insurance, but other banks can still enter based on business potential. This reduces exclusivity and encourages competition in rural banking.
What you must do
- Engage with SLBC to resolve any overlapping village allocations under EBT and FIP.
- Ensure your bank's FIP roadmap for villages with population over 2000 is on track for March 2012 deadline.
- Clarify internally that FIP allocation does not grant exclusivity; other banks may operate in same villages.
- Review cost-sharing or partnership opportunities with other banks in overlapping villages.
Who it affects
All SLBC convenor banks, Banks implementing EBT schemes in states, Banks allocated villages under FIP for population over 2000
Can my bank operate in a village already allocated to another bank under FIP?
Yes, RBI clarifies that FIP allocation ensures at least one banking outlet, but does not prevent other banks from extending services based on business potential.
What should we do if the same village is allocated to us under both EBT and FIP?
Raise the issue at the SLBC forum for resolution, as RBI expects SLBC to settle such duplicative cost concerns.