Banks have now got the relaxation to set up branches in Tier II cities of India without needing any prior approval from regulator, Reserve Bank of India.

Tier II cities refer to those which have a population between 50,000 to less than 1 lakh.

"Now that general permission to banks has been extended for opening of branches in Tier 2 centres, domestic scheduled commercial banks (other than RRBs) will be allowed to open administrative offices and central processing centres (CPCs) or service branches in Tier 2 centre (with population 50,000 to 99,999 as per Census 2001)," the RBI said in a notification.

Such a relaxation was so far given to banks only in case of Tier III to VI cities.