"To improve the performance of banks, the zero-balance account will be introduced as a new concept," RBI Governor Y V Reddy said after a day-long meeting with bankers and government officials.

Under this scheme, customers can open an account by just filling a form without depositing any money. They can also avail a credit advantage starting with Rs 100 which can be enhanced on repayments.

The new system, to be introduced throughout the country, would envisage better bank-customer relationship and develop a customer base, Reddy said.

On the northeast scenario, the RBI Governor said the poor economic activities reflected on the dismal credit-deposit ratio for the banks. "We had an intensive dialogue on this matter and instructed to give a thrust to ease constraints for development in these special category states of the region."

Saying that banks were more or less confined to urban areas, he suggested that adequate measures would be taken to reach the rural people for which fresh recruitments would also be done.

Referring to the non-circulation of below one-rupee coins in the northeast, he said new coin dispensation machines would be installed at various bank premises.