Mumbai, Feb 2: The Reserve Bank on Monday categorized Jammu and Kashmir as an unbanked state, which means that the state does not have sufficient banking facility.
 This means that banks will have to open certain number of branches particularly in the four districts of Islamabad, Doda, Kupwara and Poonch, if they want to expand their footprint elsewhere in the state.
 "We advise that J&K be included in the list of underbanked states and consequently the following under-banked districts of Islamabad, Doda, Kupwara and Poonch have been included in the list of under-banked districts," RBI said in a notification in Mumbai on Monday.
 The notification was issued under a clause which says the banks will get permission to open more branches in a state depending on various requirements, including the one that says that at least one-third of total number of branches opened in a financial year in centres with a population of up to 50,000 are in under-banked districts of under-banked state.
 Before this, there were 292 unbanked districts in the country.
GK ADDS FROM SRINAGAR
 There are 34 banks including 20 nationalized banks operating in Jammu and Kashmir. Besides the J&K Bank, which has 455 branches in the state, the other major players include the Punjab National Bank and State Bank of India.
 Of late many private banks have forayed into the state that include the HDFC Bank, Yes Bank, ICICI Bank and others. However these banks have very little branch network across the state.
 In all there are 1270 bank branches in the state.
 There are nine banks in all in the Cooperative Sector in J&K. Of these four are Non-Urban Banks and four Urban Banks. J&K State Cooperative Bank for Agriculture and Rural Development (SCARDB) is the ninth Bank. There are also two regional banks in the state.
 Observers here say that given the acceleration in the trade and industry in the state, there is a dire need for increasing the branch networks by different banks in the state. “Particularly, in the areas the branch penetration is very minimal,” they said.
 Experts said the thin presence of banks in the rural areas, besides having other disadvantages, adversely affects the savings by the people.

Lastupdate on : Tue, 2 Feb 2010 21:30:00 Makkah time
Lastupdate on : Tue, 2 Feb 2010 18:30:00 GMT
Lastupdate on : Wed, 3 Feb 2010 00:00:00 IST