Union Finance Minister Reviews Regional Rural Banks' Performance and Technological Progress

Finance Minister Nirmala Sitharaman chaired a review meeting of Regional Rural Banks (RRBs) in New Delhi, focusing on business performance, digital upgrades, and MSME support. She urged RRBs to identify beneficiaries, enhance agriculture credit, and expand digital services. RRBs' highest-ever net profit in 2023-24 was noted.

Union Finance Minister Nirmala Sitharaman conducted a review meeting with Regional Rural Banks (RRBs) in New Delhi on Monday.

The gathering of representatives from all 43 RRBs focused on evaluating business performance, enhancing digital technology services, and driving business growth within MSME clusters. According to the Ministry of Finance's release, the RRBs were urged to identify beneficiaries while approving loans under schemes like PM Vishwakarma and PM Surya Ghar Muft Bijli Yojana. They were also directed to expand their contribution to ground-level agricultural credit.

Sitharaman commended the RRBs for their significant financial performance improvements noted since 2022 and urged them to maintain this trajectory. The RRBs recorded their highest-ever consolidated net profit of Rs 7,571 crore in 2023-24, achieving the lowest Gross Non-Performing Assets (GNPA) ratio in a decade at 6.1%. Emphasizing the importance of updating technology stacks, she noted that digital banking services, such as mobile banking, are crucial for areas with challenging physical connectivity, including the North Eastern states and hilly regions.

In her address, the Union Finance Minister pushed for increased credit outreach to MSMEs in sectors like textiles, handicrafts, and food processing. She urged RRBs to develop suitable MSME products tailored to local activities and leverage regional connections to boost banking penetration. SIDBI was also tasked to support RRBs in exploring co-lending and risk-sharing models and providing refinance for the MSME sector. The meeting was attended by senior officials from the Department of Financial Services, RBI, SIDBI, NABARD, and sponsor banks' top executives.

(With inputs from agencies.)