RRBs of North-East Show Financial Turnaround: Nirmala Sitharaman Urges Increased Credit for Agriculture

Finance Minister Nirmala Sitharaman reviewed the performance of North-East India's Regional Rural Banks, noting significant financial improvements since 2022. She urged increased credit for agriculture and allied sectors and called for better financial inclusion. RRBs showed a net profit of Rs. 205 crore in FY 2024, compared to a loss in FY 2023.

The financial condition of the Regional Rural Banks (RRBs) in North-East India has improved since regular reviews began in 2022, according to the Ministry of Finance. On Monday, Union Finance Minister Nirmala Sitharaman chaired a key review meeting in Itanagar, Arunachal Pradesh, to assess the performance of seven RRBs from the region, which includes Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura.

The meeting highlighted significant improvements in both financial and technological aspects of these RRBs. 'During the review meeting, the Union Finance Minister was apprised about the improvement in the financial performance of the RRBs of the Northeast and their technology upgradation ever since the regular review was initiated in 2022,' the ministry said in a statement.

Recognizing the crucial role of RRBs in bolstering the rural economy, Sitharaman urged these banks, along with their sponsor banks, to enhance credit disbursement under Government of India's flagship schemes such as PM MUDRA Yojana and PM Vishwakarma Yojana. The focus was on increasing credit for agriculture, horticulture, and allied sectors such as piggery, goatery, sericulture, and fisheries. She also directed NABARD to promote Farmer Producer Organizations (FPOs) in the region.

Additionally, the RRBs reported a notable turnaround in profitability, with a net profit of Rs. 205 crore in FY 2024, compared to a loss of Rs. 11 crore in FY 2023. Gross Non-Performing Assets (GNPA) also improved, dropping from 15.6 percent in FY 2022 to 7.3 percent in FY 2024. The meeting saw participation from key stakeholders, including the Secretary of the Department of Financial Services (DFS), chairpersons of RRBs and sponsor banks, senior officials from RBI, NABARD, and SIDBI, as well as representatives from the seven states.

The Finance Minister called for special State Level Bankers' Committee (SLBC) meetings involving RRBs to explore opportunities in horticulture, floriculture, sericulture, and animal husbandry. She urged states to resolve issues related to land records to facilitate agricultural credit and recommended increased credit support for agri-processing units. Additionally, states were advised to ensure that mobile veterinary units are available in each district.

Sitharaman also emphasized the importance of financial inclusion, directing officials to ensure every eligible person in the North-East is covered under the Pradhan Mantri Jan Dhan Yojana (PMJDY). She instructed the DFS to collaborate with the Ministry of DoNER and the North Eastern Council (NEC) to explore credit opportunities for ODOP (One District, One Product) vendors in the region.

Finally, the Finance Minister advised RRBs to develop customized MSME products and leverage their local connections to increase market penetration. RRBs, with necessary support from Sponsor Banks and NABARD, were also directed to open new banking touchpoints in non-covered areas, especially in Nagaland and Arunachal Pradesh.

(With inputs from agencies.)