RBI to extend subsidy to banks in Sikkim for satellite connectivity and opening off-site ATMs

GANGTOK, 30 July: In a major boost to commercial banks and State Co-operative bank operating in Sikkim, the Reserve Bank of India has decided to extend subsidy to them for providing Satellite Connectivity and Off-site Automated Teller Machines (ATMs) in the State.
A press release issued by RBI informs that this facility is being extended through the “Satellite Connectivity Scheme” of RBI under which the RBI will provide financial incentives in the form of subsidy to branches of commercial banks, State Co-operative banks and off-site ATMs for providing satellite connectivity in the State.
The scheme is to be implemented subject to certain terms and conditions. The branches of commercial banks and State Co-operative bank in the State of Sikkim providing satellite connectivity to their branches and those opening off-site ATMs with separate connectivity on or after 01 April, 2012 and not later than 31 March, 2013 would be eligible for 100% subsidy subject to a maximum of Rs. 12,000 (Rupees Twelve thousand only) per month per branch/ ATM or the actual expenditure incurred by the bank whichever is less, subject to the condition that the branches would offer services of electronic funds transfer free of charge to its customers. The subsidy will stand closed for fresh claims with effect from 01 April, 2013.
Each connection will be eligible for subsidy for a period of 36 months. Therefore, if a branch/off-site ATM obtains connectivity on 31 March, 2013 it would be eligible to receive subsidy up to 31 March, 2016.
Bank branches adopting technology solutions irrespective of the technology deployed for connectivity shall be eligible for the incentive under the Scheme.
The subsidy covers the cost of VSAT, bandwidth charges, AMC, alternate sources of power and routers required for implementing the security layer.
The subsidy also covers both the operational expenditure (OPEX) and capital expenditure (CAPEX) models for deployment of satellite connectivity. For the OPEX model, the subsidy would be linked to the actual monthly lease rentals paid by the bank but for the CAPEX model the actual cost of the equipments deployed by the bank (including installation and commissioning) and recurring charges incurred such as equipment, AMC, bandwidth charges etc. would be eligible. The CAPEX model would take the total cost of ownership over a period of 36 months and arrive at the monthly cost for the purpose of claiming reimbursement from Reserve Bank. The subsidy would, however, be subject to a maximum of Rs.12,000 (Rupees Twelve thousand only) per branch.
Gangtok Office of the RBI will be the Nodal Office for monitoring the Scheme here.
The banks have to lodge consolidated annual claims in respect of their branches after the end of the financial year and will be settled by Gangtok Office after scrutiny on an annual basis. The banks will be penalised if false claim(s) are submitted by them.
It is expected that all the 26 commercial banks operating in the State will take full advantage of this Scheme and extend banking connectivity to the remotest areas and villages in the State.