The Hindu Business Line : RBI permits doorstep services by banks

The Reserve Bank of India has allowed banks to start doorstep banking, including collection of cash, but with its prior approval. Individual banks will have to formulate separate schemes for doorstep banking and obtain RBI approval before starting the service. Such services were allowed until 1983, when it was banned following malpractices.

In a circular issued on Saturday, the RBI said, "In view of several requests received from Government Departments like Railways etc. for making available banking services, including collection of cash at their premises and representations from banks, it has been decided that a scheme for providing services at the premises of a customer within the frame work of Section 23 of the Banking Regulation Act may be formulated by banks with the approval of their boards and submitted to the Reserve Bank for approval."

However, the RBI has allowed banks to provide such services to State and Central Government departments without RBI permission, until they work out a separate scheme.

Though the RBI decision will help banks to service institutional customers such as Railways, the scheme can be applicable to individual customers, said a banker. Under the scheme, a bank can send his representative to a customer's home and collect deposits. The scheme, worked out by the bank's board should have RBI approval.

The RBI decision may help banks which have been finding it difficult to mobilise deposits. In fact, the RBI Governor, Dr.Y.V. Reddy, noted in the recent monetary policy statement that the pace of deposit growth was not in keeping with the growth in credit. In this context, banks have been urged to refocus on deposit mobilisation and provide better quality of banking services to customers.

Some aggressive private and foreign banks have been providing such services to their customers without RBI permission. They can now do so legally.

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