RBI draft mandates 60% C/D ratio for rural, semi-urban branches

What’s in the draft

- SUBRATA PANDA

Banks have been mandated to have a credit-deposit (C/D) ratio of 60 per cent for their rural and semi-urban branches in the country, according to the regulator’s draft revised guidelines on the lead bank scheme (LBS).

The norms, laid down by the Reserve Bank of India (RBI), have asked banks to prioritise opening in Tier-V centres outlets powered by core banking solutions (CBS).

While the C/D ratio need not be met for each branch, district, or region, banks are required to ensure that wide interstate or inter-regional disparities in the ratio are avoided. The RBI noted that low credit offtake in some districts was due to factors such as inadequate infrastructure and limited regional credit absorption capacity.

Banks have been advised to review branch-level performance in such districts and take steps to augment credit flow. Under the revised framework, districts with a C/D ratio between 40 and 60 per cent will be monitored by the District Consultative Committee (DCC).