What changed
This master circular updates the July 2010 version by incorporating all branch authorisation instructions issued up to June 30, 2011. It consolidates the regulatory framework for opening, shifting, merging, and closing branches, including provisions for ATMs, business correspondents, and doorstep banking.
What it means for you
Banks must follow the updated consolidated guidelines for all branch-related activities to ensure compliance with Section 23 of the Banking Regulation Act. The circular provides a single reference document, reducing ambiguity and streamlining approval processes for branch expansion and rationalisation.
What you must do
- Review the updated master circular and replace the 2010 version in your compliance manuals.
- Ensure all branch opening, shifting, and closure proposals align with the new guidelines, especially for rural and underbanked areas.
- Update internal processes for reporting branch and ATM operationalisation using the prescribed annex formats.
- Foreign banks must specifically adhere to paragraph 20 of the circular for their operations.
Who it affects
All commercial banks (excluding RRBs), Local Area Banks, Foreign banks operating in India
What is the purpose of this master circular?
It provides a consolidated framework of rules and procedures for banks to follow when opening, shifting, or closing branches in India, as per Section 23 of the Banking Regulation Act, 1949.
Does this circular apply to Regional Rural Banks?
No, it explicitly excludes RRBs. It applies to all other commercial banks, including Local Area Banks.
What should foreign banks note in this circular?
Foreign banks are specifically guided by paragraph 20 of the master circular, which contains additional instructions relevant to their operations.