Banking regulator, Reserve Bank of India has decided to allow regional rural banks (RRBs) to set up new branches without applying for prior approval from the regulator. The RRBs are permitted to open branches in cities having population less than 50,000.

This move by the apex bank will also lead to a step ahead in the aim of total financial inclusion all across the country.

These banks will however have to meet certain standards in order to avail this facility like capital adequacy ratio of atleast 9% and net NPA level not exceeding 5%.

Also, the RRB should not have incurred losses in the last fiscal, read a notification by RBI. It further said that the RRBs are permitted to set up branches in Tier 3 to Tier 6 cities.