ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Dusting of Ledgers

February 22, 1969 THE study group of the National Credit Council on deposit mobilisation has recommended that commercial banks should not be allowed to open branches in metropolitan cities until their branches in semi-urban and rural areas reach 25 per cent of their total branch network. Those banks which are mainly urban-oriented now should be required in future to open three branches in centres with a population of less than 50,000 for each branch located in urban areas. Other banks which already have a fairly large network of rural branches can maintain the present ratio of 1:1 as between new branches in urban and rural areas. It is hardly feasible or necessary, however, to insist that each bank individually should comply with these norms for rural branches. The real incentive for rural branch expansion should come from business potential which has to be ascertained by proper surveys. The Reserve Bank proposes to undertake such surveys now.

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