Sitharaman chairs review meeting of Regional Rural Banks; focus on business performance, upgrading digital services

New Delhi [India], August 19 (ANI): Union Minister for Finance Nirmala Sitharaman chaired a review meeting of Regional Rural Banks (RRBs) in the national capital on Monday.

According to a Ministry of Finance release, the meeting, with all 43 present regional rural banks, focused on business performance, upgrading digital technology services, and fostering business growth in MSME clusters.

Given the crucial role of RRBs in supporting the rural economy, the Union Finance Minister urged RRBs - with the active support of their Sponsor Banks - to also put greater thrust on the clear identification of beneficiaries while sanctioning loans under various schemes such as PM Vishwakarma and PM Surya Ghar Muft Bijli Yojana. RRBs were also directed to increase their share in ground-level agriculture credit disbursement.
During a presentation in the review meeting, Sitharaman has appreciated the RRBs for the improvement in their financial performance and technology upgrades ever since the regular review was initiated in 2022 and has also urged the rural banks to continue the momentum in the future.
RRBs have recorded the highest-ever consolidated net profit of Rs 7,571 crore in 2023-24. The Gross Non-Performing Assets (GNPA) ratio of 6.1 per cent is the lowest in the previous 10 years.

During the review meeting, the Union Finance Minister underlined that all RRBs must have their own up-to-date technology stack to stay relevant and noted that digital banking services like mobile banking will be a boon for regions with relatively challenging physical connectivity (like North Eastern states and hilly regions).
The Sponsor Banks have a significant role in these endeavours by providing technical assistance, sharing best practices, and ensuring that RRBs have access to the resources they need to succeed.
The Union Finance Minister emphasised active outreach by the RRB branches located in MSME clusters to ensure credit to small and micro enterprises in areas like textile, handicrafts, wooden furniture, clay pots, jute handicrafts, leather, food processing, dairy farming, packing materials etc. that hold immense potential for increasing the loan portfolio for RRBs.
Sitharaman exhorted all the RRBs to devise suitable MSME products aligning with their cluster activities and leverage personal and local connect to increase banking penetration. SIDBI was directed to assist RRBs in exploring co-lending/risk-sharing models and extending refinance for the MSME portfolio.

Sitharaman also asked Sponsor Banks and RRBs to recognise the challenges that lie ahead and to continue focusing on maintaining asset quality, expanding digital services, and ensuring robust corporate governance.
Today's meeting was also attended by the Secretary-Designate, Department of Financial Services (DFS), Additional Secretary, other senior officials from the DFS, representatives of RBI, SIDBI, NABARD, Chairpersons of RRBs and CEOs of sponsor banks. (ANI)