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Finance Minister Nirmala Sitharaman has asked banks to map Regional Rural Banks (RRBs) with the MSME clusters and put greater thrust on increasing the network of rural branches in cluster areas identified by the MSME ministry.
These directions came at a review meeting of RRBs of the Northern Region chaired by Sitharaman here on Thursday. Also present at the meeting were DFS Secretary Vivek Joshi and senior DFS officials, representatives of the Reserve Bank of India, respective State Governments, NABARD, Sponsor Banks and RRBs.
In the review meeting, Sitharaman also asked RRBs to make efforts to remove duplication of Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts. She also emphasised increasing penetration under Pradhan Mantri Mudra Yojana and stated that a roadmap has to be prepared for completing the designated activities in a time-bound manner.
Sitharaman also emphasised the digital capability upgradation of RRBs and instructed Managing Director & CEO of Punjab National Bank (PNB) to ensure that all RRBs with PNB acquire digital onboarding capability by November 1, 2023.
In 2022-23, there was a substantial improvement in the financial performance of RRBs across the country as compared with 2021-22.
The government had recently urged RRBs to redouble their efforts to achieve the targets fixed in the viability plans for these entities.
The Finance Ministry had recently asked the Sponsor Banks along with NABARD to proactively handhold their respective RRBs for facilitating technology adoption to enable them to serve their customers more efficiently.
The need for technology upgradation of RRBs, strategies for NPA reduction, IT initiatives, improving financial inclusion, enhancing credit delivery to rural areas and support being given by sponsor banks to the RRBs are the main issues that have been discussed in the various review meetings Chaired by the Finance Minister Sitharaman across the country in recent months.
RRBs were formed under the RRB Act, 1976, to provide credit and other facilities to small farmers, agricultural labourers and artisans in rural areas.
Currently, the Centre holds a 50 per cent stake in RRBs, while 35 per cent and 15 per cent are with the concerned sponsor banks and state governments, respectively.
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