All banks are required to open 20pc branches in Rural Area’s


The State Bank has once again introduced changes in its branch licencing policy aiming at expanding its operations to remotest areas and maximum people across the country.

The changes have been made to enhance the outreach of banking services to rural and underserved areas, said the central bank on Friday.

The SBP has revisited its policy with the objectives to consolidate existing policies and instructions issued on branch licencing including opening of branches abroad, opening of branches by MFBs (Micro Finance Banks) and DFIs, shifting of branches, annual fee, etc.

Another motive is to amend the existing instructions for opening of 20pc branches in rural and underserved areas for the purpose of enhancing the outreach of banking services.

The SBP has introduced new features and options for opening of sub-branches, sales and service centres and mobile banking units and simplify the forms for submission of various applications for licencing, shifting, closing, etc., of branches.

It also aimed at rationalising some of the existing instructions for ensuring statutory and regulatory compliance.

“The policy will become effective immediately,” said the SBP.

The revised branch licencing policy has introduced several new initiatives for introduction of cost-effective option for the banks to expand outreach of services in general with specific focus on rural/underserved areas as also to improve agricultural finance.

New options include opening of sub-branches as a conduit of branches. Under sub-branch option, banks can provide limited general banking functions to their customers and disbursement and recovery of agriculture and rural financing, group based lending, lodgment and settlement of insurance claims, etc.

Under the sales and service centres option banks can provide product information and queries and customer support services. Banks have also been allowed to offer mobile banking facilities through their branches, with the objective of retail delivery of financial services at the door steps to the bank customers.

Further all banks are required to open 20pc of their total branches approved under their respective annual branch expansion plan in rural and underserved areas



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