RBI's Branch 'Expansion' policy.

What is RBI's branch expansion policy?
As per this policy,RBI uses a list of underbanked districts (last compiled in 2001) to try and force banks to open branches in areas which apparently they are reluctant to serve.

• Even today, 378 out of 603 districts are classified as underbanked despite the fact that Indian economy has more than doubled and its structure changed significantly since the list was last prepared.As an inspector of Banking, granting licenses, RBI should be aware of the current status of Banking penetration and base its policy on that.


• Among other things,RBI defines an administrative office and controlling office as a branch and hence required to be requiring its license.


• Since demand for Banking services is huge and supply perpetually low, number of branches is the golden key to profits. Instead of relying on explicit regulatory mechanism RBI uses Branches as chocolates to be distributed among well behaved kids. One major crierion for award of branches is:
  services provided by banks to common persons, particularly in underbanked areas (districts), actual credit flow to the priority sector, pricing of products and overall efforts for promoting financial inclusion, including introduction of appropriate new products and the enhanced use of technology for delivery of banking services.
  Branch license is probably a kill all solution and instead of explicit actions RBI seems to be saying do whatever you like, I ll see you at the end of year when you come to me for getting license. Only charitable comment about this can be that RBI is plain lazy.


• RBI,busy as it is, only accepts the applications for branch licenses only once a year and owing to its benevolence,applications for underbanked districts are selected throughout the year.


• Since agriculture now constitutes 25% of our GDP, probably thats why, 25% of the branches are to be setup in rural or semi-urban areas.Even in 2001, Punjab though rural has only 1 district that is underbanked,while Maharashtra has more than half of its districts underbanked(26). So branches are proportional to economic activity; why this hang up with rural/urban?As a result, while demand for banking services increases in one segment of society, RBI is adamant not to let market cater to it.


• In case of mergers,the licence (if separate licence has been issued) ) of the merged branch (transferor branch) should be surrendered to the Regional Office concerned of RBI.Maybe RBI can learn something from TRAI here and vice versa.


• As a matter of policy, closure of even loss making branches at rural centres having a single commercial bank branch (excluding Regional Rural Bank branch) is not permitted, as closure would render the centre unbanked.
  
  Banks are permitted to close any branch in metropolitan, urban and semi-urban (not assigned responsibility under Government sponsored programme) centres without seeking prior approval from RBI.
  RBI street is one way only-->underbanked/unprofitable districts.
  

The latest policy is here. A related column on Bank Nationalisation.

How can BJP prove it is better?

The BJP came up with a wonderful IT vision which was a result of the hard work of few professionals at the eleventh hour. They also issued an infrastructure vision and a manifesto which was much better than Congress.
In retrospect, very few people took these seriously including,perhaps, BJP leadership. If BJP seriously believed in any such visions it would have worked harder on it and started mobilising public opinion on these issues much earlier and not dumped them as soon as the election got over which seems to be the case at present.
When the BJP states that 85 paise out of 1 Rupee disappear due to corruption,it is blaming itself as well because its not widely recognised that almost all central government schemes are implemented with the active cooperation of state governments.
The judiciary, Police,Education,Health and power sector come under the preview of states as well.But state governments are not considered worthy of critique by most of the commentators and let off to easily.

• When it comes to disinvestment, why does not best chief minister of India Narendra Modi let go of his state PSUs so well endorsed by his colleague Arun Shourie?
  
• why do not BJP ruled state privatise or at least corporatise transport corporations taking a cue from Banglore Transport corporation?
  
• I guess Electricity and Transport utility are chief among the loss making enterprises.Why not privatise the state electiricty generation/transmission and distribution and take the process initiated by BJP to its logical conclusion?
  
• What prevents BJP ruled states from reining in absentee school teachers and doctors?
  
• Why cant other BJP ruled states take a cue from Gujarat and start evening courts to reduce backlog of cases?
  
• Can any of the BJP ruled states claim that their Police departments are entirely professional and free from political interfernce?The recent initative of Shivraj Singh chauhan of organising Jan Sunvai with Police officers is a good initiative.
  
• Are the borders of BJP ruled states free from rent seeking behavior by Inspectors, why cant they follow the example of Gujarat of computerising the weighing of trucks?
  
• The BJP led state governments can still follow up on the promise of digitisation of government documents promised in their IT vision.
  

There seems to be an impression that only government is central government and public intellectuals have a task at hand here.

RBI's select economic indicators and Emp exchange data

Summary of select economic indicators is here Look at the employment exchange statistics:
Number of Registrations 6.5 million
Placed in employment: 2.65 lakhs
On live register: 34.6 million

Conclusion:
Options(multiple choice)
a)RBI should stop collecting this vital economic data and start using more contemporary
indices like job portals and number of jobs advertised in newspapers
ball employment exchanges should be shutdown.
c)GoI should pretend to be doing something about it by appointing a commission.
d)Management of Employment exchanges should be handed over to private sector.
e)Job portals should start their physical presence to cater to non netizens which is a big market(>94% of whole labour force of India).
f)Employment exchanges should be made digital.

Thanks to ankush for correcting the mistakes in first draft and sharing Assocham study on efficacy of Employment exchanges and the exampleset by Gujarat. One caveat is that the low unemployment rates mentioned here are misleading since it includes sub subsistence employment as employed (@ <$1 a day) as elaborated by Bibek Deb Roy