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After a gap of 21 years, the Reserve Bank of India has once again allowed domestic banks to offer doorstep banking, to their customers but with its prior approval.
A circular issued on April 30 stated that, "A scheme for providing services at the premises of a customer within the framework of Section 23 of the Banking Regulation Act 1949 may be formulated by banks with the prior approval of their board and submitted to the Reserve Bank for approval".
The practice was banned in May 24,1983 whereby banks were advised not to extend any banking facilities at premises of their customers without prior approval of the RBI.
The decision, the circular stated, has been taken in view of several requests received from government departments such as railways and representation from banks.
Till the time a separate scheme is worked out, agency banks in the business of conducting government business may continue to lift cash and collect credit instruments from premises of central and state government departments.
Government business, includes disbursing pension, distribution and collection under savings bonds among other things.
Explaining the significance of the development, a banker said the facility follows the RBI's resolve to pay special attention to the needs of a typical Indian depositor who seeks safe avenues for his savings.
In its annual credit policy announced last, the governor stated, "banks are urged to refocus on deposit mobilisation and empower depositors by providing wider access and better quality of banking services.
Therefore, the RBI will persist with its efforts to ensure quality of banking services in particular to small individual depositors.
The RBI has also decided to set up an independent banking codes and standards board of India on the model of mechanism in the UK which will evolve comprehensive code of conduct for fair treatment of customers.