RBI's new guidelines have given the domestic scheduled commercial banks a big fillip in their branch opening plans. As per the new guidelines, domestic scheduled commercial banks do not need explicit permission(license) to open new branches in cities with less than 50,000 population.
what this means for some of the banks
- PNB can open 440 more branches this year without bothering about RBI approval
- UCO plans to open 140 branches this year but would need licenses for only 89

Clearly, RBI wants the financial system to reach smaller towns & cities and this would be a big step in that direction.

The Raghuram Rajan Committee has recommended that RBI allow private companies to launch Local Area Banks (LABs) which will have a jurisdiction of 3 contigous districts.
This move which is aimed to increase the population under banking system will in all probability see a lot many financial institutions mushroom up in the semi-urban & rural areas.
The LABs will have an option to become small finance banks with a capital base below Rs 300 Crores if they show a good track record & want to raise their own deposits.

Commerical property loans will see a northward movement with the new RBI guidelines wherein the risk load has been increased.

The Banking Codes and Standards Board of India has issued a directive to all its commercial member banks to be more transparent with regards to retail loans.

Few specific directives that loan seekers should be aware of are:

1. Inform all those who avail Floating rate home loans, of the reference rate to which the floating rate is anchored.