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Issue of authorization for opening Controlling Offices (Regional/Zonal/Administrative Offices) u/s 23 of the Banking Regulation Act, 1949 (AACS)

RBI/2015-16/438
DCBR.CO.LS (PCB) Cir.No.19/07.01.000/2015-16

June 30, 2016

Chief Executive Officers of all
Primary (Urban) Co-operative Banks

Dear Sir / Madam,

Issue of authorization for opening Controlling Offices (Regional/Zonal/Administrative Offices) u/s 23 of the Banking Regulation Act, 1949 (AACS)

As you are aware, licence under section 23 of the BR Act, 1949 (AACS) is required for opening Controlling Offices (Regional/Zonal/Administrative Office) in terms of instructions contained in our circular UBD.RBL.33/J-86-87 dated October 15, 1986.

2. The matter was revisited in the light of requests received from UCBs for setting up Controlling Offices (Regional/Zonal/Administrative Offices) and it has been decided that licensed UCBs which have implemented CBS and are fulfilling the following criteria may, at their discretion, open one controlling office for a cluster of not less than 40 branches without prior approval of RBI:

  1. CRAR is not less than 10 per cent.

  2. Gross NPAs are less than 7 % and Net NPAs are not more than 3%.

  3. The bank should have made a net profit in the immediate preceding financial year and overall, should have made net profit at least in three out of the preceding four financial years.

  4. It should not have defaulted in maintenance of CRR / SLR during the immediate preceding financial year.

  5. It should have sound internal control systems with at least two professional directors on the Board.

  6. The bank should have a track record of regulatory compliance and no monetary penalty should have been imposed on the bank for violation of RBI directives / guidelines during the two financial years, preceding the year in which the controlling office is proposed to be opened.

3. UCBs must ensure that the controlling office is opened within their Area of Operation (as approved by RBI) and should not have any direct interface / business transactions with customers. Furthermore, eligible UCBs are required to submit full details regarding opening of such offices, within two weeks to the Regional Office concerned for issue of licence u/s 23 of the Act ibid.

Yours faithfully,

(Suma Varma)
Principal Chief General Manager

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