(Image source from: x.com/FinMinIndia)
The Union Finance and Corporate Minister Nirmala Sitharaman reviewed the performance of 10 Regional Rural Banks (RRBs) in the Southern Region in Bengaluru. She assessed the performance of RRBs in Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Kerala, and the Union Territory of Puducherry. The meeting was attended by the Union Minister of State for Finance, the Department of Financial Services secretary, state government officials, representatives from SIDBI, NABARD, RRB stakeholders, and sponsor banks. The Finance Minister has been evaluating the performance of RRBs across the country due to their crucial role in supporting the rural economy. During a previous meeting with RRBs in Delhi, the Union Finance Minister urged them and their sponsor banks to focus on clearly identifying beneficiaries when sanctioning loans under various schemes. The RRBs were also directed to increase their share in ground-level agricultural credit disbursement.
Union Minister for Finance and Corporate Affairs Smt. @nsitharaman chairs a meeting to review the performance of 10 Regional Rural Banks #RRBs of the Southern Region, in Bengaluru, Karnataka, today.
— Ministry of Finance (@FinMinIndia) November 9, 2024
The RRBs performance review covers the States of Karnataka, Tamil Nadu, Andhra… pic.twitter.com/siLbpcmwHA
The Finance Minister has emphasized the need for continuous technology upgrades and performance improvement in rural banks since the initiation of regular reviews in 2022. She stressed the importance of rural banks having their own up-to-date technology stack to remain relevant, particularly in regions with limited physical connectivity, where digital banking services like mobile banking can be a valuable asset. The sponsor banks play a crucial role by providing technical assistance, sharing best practices, and ensuring that rural banks have access to the resources they require for success. The Finance Minister also highlighted the importance of active outreach by rural bank branches located in MSME clusters to extend credit to small and micro enterprises in sectors with high potential, such as textile, handicrafts, wooden furniture, and food processing. She urged all rural banks to develop suitable MSME products aligned with their cluster activities and leverage personal and local connections to increase banking penetration. The Small Industries Development Bank of India (SIDBI) was directed to assist rural banks in exploring co-lending/risk-sharing models and extending refinance for the MSME portfolio.
Banks and regional rural banks must acknowledge the upcoming difficulties and keep concentrating on preserving asset quality, expanding digital offerings, and ensuring strong corporate management.
