We have liberalized branch licencing – domestic commercial banks are now free to open branches anywhere they like in towns and villages of up to 100,000 population. Banks are also required to ensure that at least a quarter of the branches they open are in villages with a maximum population of 10,000.
To provide an incentive to banks, the Reserve Bank has also advised them that their performance in financial penetration will be a criterion in giving them authorization for branches in metros and other large urban areas. There is a road map for providing banking access to all villages in the country with population of over 2000 by March 2012.