RRBs should focus on credit for agriculture, horticulture and allied activities: Sitharaman

Smt. Sitharaman stressed the importance of financial inclusion, stating that every eligible individual in the Northeast should be covered under the Pradhan Mantri Jan Dhan Yojana (PMJDY).

In a significant meeting held in Itanagar, Arunachal Pradesh, Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman convened to review the performance of seven Regional Rural Banks (RRBs) serving the Northeastern states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura. The meeting aimed to assess the financial health and operational effectiveness of these banks since the regular reviews commenced in 2022.

Attendees included Shri M. Nagaraju, Secretary of the Department of Financial Services (DFS), chairpersons of the RRBs, representatives from sponsor banks (including the Chairman of SBI and Managing Director of PNB), senior officials from the DFS, as well as representatives from RBI, NABARD, and SIDBI.

Financial Performance and Technology Upgrades

During the review, it was highlighted that the financial performance of the RRBs in the Northeast has shown remarkable improvement. The Consolidated Capital to Risk Assets Ratio (CRAR) stands at a healthy 15% for the financial year 2024, indicating robust financial stability. Notably, profitability has surged, with a net profit increase from Rs. 11 crore in FY 2023 to Rs. 205 crore in FY 2024. Additionally, the Gross Non-Performing Assets (GNPA) ratio has seen a substantial decline, improving from 15.6% in FY 2022 to 7.3% in FY 2024.

Emphasis on Agricultural Credit and Government Schemes

Recognizing the crucial role of RRBs in bolstering the rural economy, Smt. Sitharaman urged these banks to enhance credit disbursement under various Government of India flagship schemes such as MUDRA and PM Vishwakarma. She emphasized the need for increased focus on credit for agriculture, horticulture, and allied activities, including piggery, goatery, sericulture, and fisheries.

The Minister directed NABARD to promote Farmer Producer Organizations (FPOs) in the Northeast to further support local agricultural initiatives. Additionally, she called for special State Level Bankers' Committees (SLBCs) meetings involving RRBs to explore the potential of horticulture, floriculture, sericulture, and animal husbandry in the region. Smt. Sitharaman urged stakeholders to address the availability of land records for extending agricultural credit and to boost financing for agri-processing units. Furthermore, she recommended ensuring that mobile veterinary units are available in each district to support local farmers.

Financial Inclusion Initiatives

Smt. Sitharaman stressed the importance of financial inclusion, stating that every eligible individual in the Northeast should be covered under the Pradhan Mantri Jan Dhan Yojana (PMJDY). She also instructed the DFS to coordinate with the Ministry of DoNER and the North Eastern Council (NEC) to explore credit extension possibilities for One District One Product (ODOP) vendors in the region.

Moreover, the Minister advised all RRBs to develop tailored MSME products that align with local activities and to leverage their connections to enhance market penetration.

Expanding Banking Services

To improve banking access, Smt. Sitharaman directed RRBs, with the necessary support from sponsor banks and NABARD, to establish new banking touchpoints in underserved areas, particularly in Nagaland and Arunachal Pradesh. This initiative aims to ensure that financial services are more accessible to the rural populations of these states.

Overall, the meeting underscored the commitment of the Government of India to strengthen the financial framework of RRBs in the Northeast, enabling them to better serve local communities and foster economic growth in the region. 4o mini