EXHIBIT 10.7(b)

                              BANK RHODE ISLAND

                             AMENDMENT NO. 3 TO

                   SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


      WHEREAS, Bank Rhode Island (the "Bank") desires to amend the
provisions of the Bank's Supplemental Executive Retirement Plan (the "Plan")
to change the definition of "Change of Control" under the Plan; and

      WHEREAS, under Article VIII of the Plan, the Board of Directors of the
Bank may amend the Plan at any time, provided that such amendment shall not
reduce the vested benefit of any Participant or amend Section 6.1 or 6.2 of
the Plan without the consent of all Participants; and

      WHEREAS, under Section 3.1 of the Plan, the Board of Directors of the
Bank may from time to time select employees who shall be Participants in the
Plan and shall determine the Applicable Benefit Amount for such Participants
(as such terms are defined in the Plan); and

      WHEREAS, on September 19, 2000 the Board of Directors of the Bank
approved amending the definition of "Change in Control" under the Plan and
approved increasing the Applicable Benefit Amounts payable to Participants
under the Plan;

      NOW, THEREFORE, the Plan is amended as follows:

      1.    That Schedule A of the Plan be amended in its entirety to read
as set forth on Schedule A attached hereto.

      2.    Schedule B of the Plan be amended to increase the Applicable
Benefit Amount payable to Merrill W. Sherman to $150,000 as set forth in
Schedule B attached hereto.

      3.    Schedule C of the Plan be amended to increase the Applicable
Benefit Amounts payable to the Participants listed thereon as set forth on
Schedule C attached hereto.

      4.    All other provisions of the Plan shall remain in full force and
effect and are hereby ratified, approved and confirmed.

      IN WITNESS WHEREOF, the Company has caused this Amendment No. 3 to the
Supplemental Executive Retirement Plan to be executed by its duly authorized
officer as of the 1st day of January, 2001.

                                       BANK RHODE ISLAND


                                       By:  /s/Malcolm G. Chace
                                            -------------------------------
                                            Malcolm G. Chace,
                                            Chairman


Attest:

/s/ Margaret D. Farrell
    Secretary


                                 SCHEDULE A
                                 ----------

                                     TO

                   SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

      (A)   Change in Control.  For purposes of this Plan, a "Change in
Control" shall be deemed to have occurred if and when:

            (1)  a Takeover Transaction is effectuated; or (2) Bancorp
      Rhode Island, Inc. (the "Company") commences substantive negotiations
      with a third party with respect to a Takeover Transaction if within
      twelve (12) months of the commencement of such negotiations, enters
      into a definitive agreement with respect to a Takeover Transaction
      with any party with which negotiations were originally commenced; or
      (3) any election of directors of the Company occurs (whether by the
      directors then in office or by the shareholders at a meeting or by
      written consent) where a majority of the directors in office
      following such election are individuals who were not nominated by a
      vote of two-thirds of the members of the board of directors
      immediately preceding such election; or (4) either of the Company or
      the Bank effectuates a complete liquidation.

      (B)   Takeover Transaction.  A "Takeover Transaction" shall mean:

            (1)   The acquisition of voting securities of the Company by
      any individual, entity or group (within the meaning of Section
      13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
      amended (the "Exchange Act")), other than by the Company or its
      subsidiaries or any employee benefit plan (or related trust) of the
      Company or its subsidiaries, which theretofore did not beneficially
      own (within the meaning of Rule 13d-3 promulgated under the Exchange
      Act) securities representing 30% or more of the voting power of all
      outstanding shares of voting securities of the Company, if such
      acquisition results in such individual, entity or group owning
      securities representing more than 30% of the voting power of all
      outstanding voting securities of the Company; provided, that any
      acquisition by a corporation with respect to which, following such
      acquisition, more than 50% of the then outstanding shares of voting
      securities of such corporation, is then beneficially owned, directly
      or indirectly, by all or substantially all of the individuals and
      entities who were the beneficial owners of the voting securities of
      the Company outstanding immediately prior to such acquisition in
      substantially the same proportion as their ownership, immediately
      prior to such acquisition, of the outstanding voting securities of
      the Company, shall not constitute a Change in Control; or

            (2)   The issuance of additional shares of common stock of the
      Company or the Bank, as applicable, in a single transaction or a
      series of related transactions if the individuals and entities who
      were the beneficial owners of the outstanding voting securities of
      the Company or the Bank, as applicable, immediately prior to such
      issuance do not, following such issuance, beneficially own, directly
      or indirectly, securities representing more than 50% of the voting
      power of all then outstanding voting securities of the Company or the
      Bank, as applicable; or

            (3)   Consummation by the Company or the Bank of (a) a
      reorganization, merger or consolidation, in each case, with respect
      to which all or substantially all of the individuals and entities who
      were the beneficial owners of the voting securities of such entity
      immediately prior to such reorganization, merger or consolidation do
      not, following such reorganization, merger or consolidation,
      beneficially own, directly or indirectly, securities representing
      more than 50% of the voting power of then outstanding voting
      securities of the corporation resulting from such a reorganization,
      merger or consolidation, or (b) the sale, exchange or other
      disposition (in one transaction or a series of related transactions)
      of all or substantially all of the assets of the Company (on a
      consolidated basis) or the Bank to a party which is not controlled by
      or under common control with such entity, or (c) the sale by the
      Company in one transaction or in a series of related transactions of
      voting securities of the Bank such that following such transaction or
      transactions the Company no longer beneficially owns, directly or
      indirectly, securities representing more than 50% of the voting power
      of the then outstanding voting securities of the Bank.

      For purposes of this Section (B), "voting power" means ordinary
voting power for the election of directors.


                                 SCHEDULE B
                                 ----------


         Participants:         Applicable Benefit Amount
         ------------          -------------------------

      Sherman, Merrill W.               $150,000


                                 SCHEDULE C
                                 ----------

         Participants:         Applicable Benefit Amount
         ------------          -------------------------

      DeRentis, James V.                $ 35,000
      McQueen, Donald C.                $ 50,000
      Rietheimer, Albert R.             $ 50,000