Section 23 of Banking Regulation Act, 1949 –
Today Reserve Bank of India, DBOD, Vide Notification No.RBI/2010-11/132
DBOD.No. BL.BC.27/22.01.001/2010-11,dt.July 23, 2010, addressed to All Scheduled Commercial Banks (excluding RRBs), has liberalized the rules for Opening of Mobile Branches and Mobile ATM’s.
The Highlights are:
01) Notification pertains to Section 23 of Banking Regulation Act, 1949 –
Mobile Branches and Mobile ATMs
02) Mobile Branches
a) Grant general permission to domestic scheduled commercial banks (other than RRBs) to operationalise Mobile branches in Tier 3 to Tier 6 centres (with population upto 49,999 as per Census 2001) and in rural, semi urban and urban centres in the North Eastern States and Sikkim, subject to reporting to RBI.
b) The scheme of mobile branch envisages the extension of banking facilities through a well protected van with arrangements for two or three officials of the bank sitting in it with books, safe containing cash etc.
c) The mobile unit would visit the places proposed to be served by it on specific days / hours.
d) The mobile branch should not visit villages / centres which are served by co-operative banks and places served by regular branch of commercial banks.
e) The mobile branch should be stationed in each village/ location for a reasonable time on specified days and specified hours, so that its services could be utilized properly by customers.
f) The business transacted at the mobile branch shall be recorded in the books of the base branch/data centre.
g) The bank may give wide publicity about the mobile branch in the village, including details of “specified days and working hours” at various locations so as to avoid any confusion to local customers; and any change in this regard should also be publicized.
h) In order to inform public/customers, arrangement should be made to display these details in the areas serviced by the mobile branch.
The above liberalization should banks to be innovative while servicing the needs of the customers in Unbanked areas.
There can be more than 1 Mobile branch of different scheduled banks, visiting the same place at the same time. Such competition is better, as competition is the path to customer delight.
For eg: At a weekly shanty(local market day), as the villagers gather in large numbers, multiple banks might decide to operate the Mobile Branches.