The maximum number of branches will be opened in Rajasthan. Credit: F1 Digitals from Pixabay.

Indian public sector banks are set to open some 300 physical branches by the end of 2022 to drive financial inclusion, reported PTI via Money Control. 

The new branches will open in multiple states across the country and cover the remaining underbanked villages with a population of more than 3,000, the sources told the news agency.

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As per the plan, 95 branches will open in Rajasthan, and 54 in Madhya Pradesh.

The banks will also open 38 brick-and-mortar branches in Gujarat, 33 in Maharashtra, 32 in Jharkhand and 31 in Uttar Pradesh.

As per the report, last month, heads of public sector banks met with the Financial Services Secretary to review the progress they have made in opening rural branches.

The lenders are required to set up branches at locations specified by the concerned State Level Bankers’ Committee (SLBC) by December 2022, the sources added. 

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The initiative will see the State Bank of India set up 60 branches and the Bank of Baroda open 76 branches. 

The move is part of the government’s efforts to drive financial inclusion by providing a platform to underbanked customers, enabling them to be part of the formal financial system. 

In a separate development, the Reserve Bank of India (RBI) said that regulated entities (REs) offering credit via digital means have until 30 November to comply with new norms for existing digital loans.  

The central bank stated that “in order to ensure a smooth transition, regulated entities shall be given time till 30 November, to put in place adequate systems and processes. It is to ensure that ‘existing digital loans’ (sanctioned on the date of the circular) are also in compliance with these guidelines.”.

Last month, the RBI issued new rules to tighten its regulatory grip on the digital lending space.