An area of concern has been the concentration of bank branches in metropolitan areas to the detriment of semi urban and rural areas. To mitigate this problem, since 2006, opening of new branches for any bank is approved by RBI only on condition that at least half of such new branches are opened in under-banked areas as notified by RBI.
The income elasticity of demand for broad money which has been proven to be reasonably stable and is in the range of 1.5 to 1.6 in India should be taken into account.