NEW DELHI: The Modi government has provided Rs 6212.03 crore to regional rural banks under the recapitalization scheme since March 6.
Regional Rural Banks (RRBs) are commercial banks owned by the Indian government that operate at the regional level in different states. RRBs were established in 1975 to provide basic banking and financial services to rural areas, especially to small and marginal farmers, agricultural workers, artisans, and small entrepreneurs.
The performance of RRBs has improved significantly, with a consolidated CRAR (Capital to Risk-weighted Asset Ratio) at an all-time high of 13.83 percent as on December 31, 2023.
Under the scheme, recapitalization support is provided to RRBs to maintain the minimum prescribed capital-to-risk (Weighted) Assets ratio of nine percent.
Indian RRBs have shown the highest ever consolidated net profit of Rs 4,974 crore in FY22-23 and a net profit of Rs 5,236 crore till the 3rd quarter of FY 2023-24.
Similarly, the credit expansion led to an increase in the consolidated credit deposit to 72.13 percent as of 30.09.2023, which is the highest in the last 15 years.
This comes on the back of a 3-year board-approved sustainability plan (VP) in the financial year 2022-23, with a well-defined implementation mechanism aimed at achieving sustainability.
RRBs are essential for banking and financial services to rural communities, agricultural activities and small businesses.
There are 43 RRBs sponsored by 12 scheduled commercial banks in India.