In its directive, the Reserve Bank of India has allowed the urban co-operative banks (UCBs) to start their off-site ATM.

Till now, the UCBs had t to take prior approval from the central bank for opening their ATMs at places which were not within their branch area.

The notification of RBI said, "It has been decided to allow well-managed UCBs to set up off-site ATMs without seeking approval through the annual business plans."

But, for being able to do this, the UCBs will have to satisfy a particular set of criteria. The first is that the banks should have shown continuous net profit for the last three years and the level of the non-performing assets (NPAs) should be less than 5 per cent.

The other requirements include the minimum capital adequacy ratio of 10 per cent on a continuous basis. The UCBs also should not have been defaulter in terms of the maintenance of statutory reserves.

Central bank has taken this step so that the UCBs are able to expand themselves and do better.

RBI had already asked in its monetary policy for 2010-11, the annual business plan of these UCBs. These were based on the centers allotted to them.