Regional rural banks should distribute more loans, generate awareness of govt schemes, says FM Sitharaman

Finance Minister Nirmala Sitharaman chairs meeting to review performance of nine Regional Rural Banks (RRBs) on August 22 (Image - PIB)

Finance Minister Nirmala Sitharaman asked regional rural banks (RRBs) to leverage their healthy CASA ratio to distribute more loans, while requesting the RBI’s intervention in resolving the pending dues to RRBs from state governments, apart from the efforts being taken by the government and sponsor banks.

Sitharaman headed a meeting to review performance of nine Regional Rural Banks (RRBs) of Gujarat, Maharashtra, Madhya Pradesh, Chhattisgarh and Rajasthan, in Udaipur, on August 22.
The minister “…emphasised on active outreach by RRB branches located in MSME clusters to ensure credit to small and micro enterprises. All RRBs have devised customised MSME products aligning with cluster activities. However, they need to regularly review their credit portfolio in that segment,” according to a government statement that was released after the meeting.

The RRBs must also cope with challenges ahead, such as maintaining asset quality, expanding digital services, and ensuring robust corporate governance are the areas that require continued focus, Sitharaman said.

Keeping in mind the crucial role played by the RRBs in supporting the rural economy, the minister urged RRBs to generate awareness of Government schemes, especially in aspirational districts.

In this area, she mentioned the potential of ‘PM Surya Ghar Muft Bijli Yojana’ scheme in states of Gujarat and Rajasthan and urged RRBs to generate awareness and provide credit under the scheme. The potential of One District One Product (ODOP) programme was also highlighted to increase credit penetration by RRBs, and they were also directed to identify potential trades under ‘PM Vishwakarma’ scheme in their areas of operation to provide credit.

“RRBs were also directed to increase their share in ground level agriculture credit disbursement and achieve the stated objectives of priority sector lending,” the statement added.