New private sectors banks have not met the stipulation of opening 25 per cent of branches in rural and semi-urban areas, a parliamentary committee report has observed.
"As per the guidelines, new private sector banks are required to open 25 per cent of branches in rural/semi-urban areas. However, these banks have only 9.52 per cent of such branches," the report of the Standing Committee on Finance said.
These banks have 'failed to reach rural masses on a large scale', the committee headed by N Janardhana Reddy said adding the private banks should be asked to open more branches and step up their credit disbursement in rural areas.
The committee observed that old private sector banks have 24.23 per cent of branches in rural areas.
The report asked the public sector and other banks to develop necessary relationship with rural clients besides launching innovative products specific to their credit needs and take steps to make farmers aware of such products.