Reserve Bank of India (RBI) has decided that it would allow healthy urban co-operative banks to open up offisite ATMs but with strict adherence to corporate governance norms.

So, those banks which have low NPA levels, are in profit for three consecutive years and have professionals on their boards can set offsite ATMs without prior approval of RBI.

The banks have to maintain their NPAs below 5%. A bank which has failed to meet CRR or SLR requirements would be disqualified. Also, a capital adequacy ratio of less than 10% would bring in disqualification.

The new guideline by RBI also reads that approval is subject to regulatory comfort on issues like track record of compliance with the provisions of Banking Regulation Act, 1949, RBI Act, 1934, and the instructions or directions issued by RBI from time to time.

"The only liberalisation is that if an UCB is eligible as per new norms, it does not have to seek prior approval from RBI to set up offsite ATMs," say officials of urban cooperative banks.

The monetary policy announcement has said that the healthy urban co-ops need to submit a detailed business plan encompassing all details about where they plan to open new branches on off-site ATMs.

"In order to further improve the banking infrastructure, it has been decided to liberalise the approach to set up offsite ATMs by UCBs. Accordingly, it is proposed to allow well-managed UCBs to set up offsite ATMs without seeking approval through the annual business plans," said the RBI policy.