Beyond 300 is a conditional route
Paragraph 3(i) of RBI's exchange-house Vostro Master Direction prescribes a prudential cap of 300 drawee branches but permits designation beyond that number subject to its conditions. The bank must ensure the relevant branches operate under CBS with online fund-position monitoring to avoid concealed vostro overdrafts, obtain necessary Board approval before increasing beyond 300 and inform RBI immediately. This guide uses the direction updated on 1 October 2026 and checked on 28 October 2026. RBI RDA Master Direction: paragraph 3(i).
Count drawee branches rather than every system record
Ground the scope in the actual tie-up and designation register. Distinguish drawee branches from duplicate codes, migrated identifiers, non-drawee offices and proposed locations not yet designated. A branch's existence in the bank's general network does not alone establish its role in the arrangement. Do not infer an alternative aggregation rule where the tie-up approval or direction requires a particular scope; document and clarify it. RBI RDA Master Direction: paragraph 3(i).
CBS must support the specified control objective
A technical CBS flag is not enough if payment processing cannot see current funds or if channels use stale balances. Demonstrate online monitoring of the relevant vostro position and identify queued payments, posting delays and manual overrides. The object is avoiding concealed overdrafts, not merely collecting a system-installation certificate. Designation should follow actual operational readiness. RBI RDA Master Direction: paragraph 3(i).
Approval precedes expansion
Retain the Board decision, authorised scope and implementation sequence. The paragraph expressly calls for Board approval; do not import committee-delegation wording from a different paragraph of the direction. Immediate RBI information is a separate requirement and does not retroactively substitute for the prior Board decision. Preserve the communication and acknowledgement trail without inventing an alternative fixed number of days. RBI RDA Master Direction: paragraph 3(i).
Observe the tie-up conditions as well
The exception remains subject to RBI's approval terms for the exchange-house tie-up and RDA instructions from time to time. Crossing the branch boundary does not relax funding, permitted-transaction or KYC requirements. Examine the actual conditions rather than describing CBS adoption as a blanket authorisation for unlimited locations or overdrafts. RBI RDA Master Direction: paragraph 3(i).
Make changes reproducible
Use a dated bridge from the established active drawee population to additions, closures and code replacements. Test the resulting list against approvals and CBS evidence before activation. Where data quality is uncertain, preserve the exception and resolve it rather than manipulating the branch count. Numerical liquidity examples below are recommended operational tests, not RBI-prescribed minimum balances or an additional statutory formula. RBI RDA Master Direction: paragraph 3(i).
Applicable primary references
RBI RDA Master Direction: paragraph 3(i)
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Crossing the boundary
A verified population of 298 drawee branches proposes five additional designations. The result is 303, three above 300. The beyond-300 route needs its conditions met before the expansion; it is not enough that the increase itself is only five.
Illustrative example 2: Exactly at the boundary
A verified population of 294 adds six drawee branches, producing 300. This does not itself cross the stated boundary. Other tie-up and RDA requirements still apply; 300 is not an exemption from them.
Illustrative example 3: Duplicate records distort the count
A migration extract contains 307 active-looking rows but seven are proved duplicate identifiers for the same drawee branches. The unique count is 300. Keep the mapping evidence; deleting seven rows without proof would not establish compliance.
Illustrative example 4: Readiness is not designation
Of 20 proposed new branches, 16 pass the bank's documented online-monitoring tests and four do not. Four remain unresolved even though all 20 have CBS identifiers. The 80% test-pass result is a fictional project metric, not an RBI permitted-failure threshold.
Illustrative example 5: Stale fund views can conceal a deficit
Available vostro funds are ₹10,00,000. Two branches each release ₹6,00,000 using the same stale balance. Combined debits ₹12,00,000 exceed the opening funds by ₹2,00,000. Online monitoring and shared release controls must address this race; an overnight reconciliation does not prevent it.
Illustrative example 6: Reconcile genuine additions and closures
An established list has 310 branches under a valid existing beyond-cap arrangement. Four actual closures and nine proposed additions produce 315. The net increase is five, but review all nine additions for readiness and the actual approval scope; netting does not erase their separate activation checks.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Ground the tie-up scope | Exchange-house approval and current conditions |
| 2 | Identify active drawee branches | Designation register and effective dates |
| 3 | Remove proved duplicate codes | Migration and identifier mapping |
| 4 | Bridge proposed changes | Additions, closures and resulting total |
| 5 | Assess the 300 boundary | Unique before-and-after count |
| 6 | Verify CBS operation | Branch-specific deployment evidence |
| 7 | Test online funds visibility | Posting sequence and simultaneous-payment controls |
| 8 | Obtain required prior Board approval | Actual decision and authorised scope |
| 9 | Inform RBI immediately | Communication and delivery evidence |
| 10 | Verify activation and ongoing monitoring | Final register, exceptions and funding review |
Sixteen practitioner FAQs
1. Where is the branch boundary prescribed?
Paragraph 3(i) of the exchange-house Vostro Master Direction.
2. Is more than 300 categorically prohibited?
No. The direction provides a conditional beyond-300 route.
3. What technology condition applies?
CBS operation with online funds-position monitoring to avoid concealed vostro overdrafts.
4. Is a CBS identifier alone enough evidence?
Verify that the required monitoring actually works.
5. When is Board approval required?
Before increasing the number of drawee branches beyond 300 under the stated route.
6. Can a later Board minute automatically cure an earlier activation?
Do not treat it as compliance with the prior-approval sequence.
7. Does this paragraph expressly provide the committee substitution found elsewhere?
It calls for necessary Board approval; do not transplant a different paragraph's delegation wording.
8. When must RBI be informed?
The paragraph says immediately; no alternative fixed day period is invented here.
9. Do tie-up approval conditions still apply?
Yes, the exception expressly remains subject to them and RDA instructions.
10. Are all bank offices automatically drawee branches?
No. Ground the actual designation and arrangement scope.
11. Can duplicate migration codes be ignored without evidence?
No. Preserve the unique-branch mapping and effective dates.
12. Does reaching exactly 300 equal crossing 300?
No, although the remaining applicable conditions continue.
13. Can closure of a branch mask readiness gaps in new branches?
No. Reconcile the net count and review each new designation.
14. Does expansion authorise overdrafts?
No. The monitoring objective is avoiding concealed overdrafts and the other funding instructions remain relevant.
15. Is an end-of-day funds match sufficient for simultaneous payments?
It does not by itself demonstrate that earlier releases avoided a deficit.
16. What should the final evidence file contain?
The designation bridge, approval, RBI communication, tie-up conditions and branch-level monitoring tests.
Conclusion
Review RDA drawee-branch expansion beyond 300 using an accurate branch register, CBS fund monitoring, prior Board approval and immediate RBI information.