Finance Minister Nirmala Sitharaman recently presided over a review meeting with chairpersons and senior officials of Regional Rural Banks (RRBs) from the southern region in Chennai. During the meeting, she emphasized the significance of RRBs continuing their focus on flagship schemes initiated by the Central government. Sitharaman urged RRBs to work towards the saturation of schemes such as PMJJBY, PMSBY, PM SVANidhi, Atal Pension Yojana, PM Jan Dhan Yojana, PM Mudra Yojana, KCC, KCC Animal Husbandry & Fisheries, among others.
Furthermore, the Finance Minister emphasized the importance of improving the current and savings account (CASA) ratio of RRBs and sponsor banks. CASA deposits play a crucial role in enhancing a bank’s stability and financial performance, and increasing this ratio would signify a healthier mix of low-cost funds for the banks.
In addition to CASA, Sitharaman highlighted the significance of other financial metrics, including the Credit-Deposit (CD) ratio, Gross Non-Performing Assets (NPAs), and Provision Coverage Ratio (PCR). Improving these metrics will not only enhance the financial health of RRBs but also reinforce their capacity to support various developmental initiatives.
The meeting saw the presence of key officials, including the secretary of the Department of Financial Services (DFS), senior representatives from the Reserve Bank of India (RBI), and senior finance department officials from Tamil Nadu, Andhra Pradesh, Telangana, Kerala, Puducherry, and Karnataka.
During the discussions, the Finance Minister stressed the necessity for RRBs to embrace technology and adopt modern systems such as Loan Management System and Core Banking System in a time-bound manner. Embracing technology will improve efficiency and accessibility, benefiting both the banks and their customers.
Digitalization remained a focal point of the meeting, with Sitharaman urging RRBs to focus on increasing digitally active customers. This aligns with the government’s push towards greater digitalization and financial inclusion, ensuring that banking services are accessible to a larger population.
Additionally, the Finance Minister recommended that sponsor banks establish closer ties with Micro, Small, and Medium Enterprises (MSME) clusters. By mapping RRBs with these clusters, financial institutions can enhance their presence and develop innovative products tailored to better serve MSMEs.
The review meeting chaired by Finance Minister Nirmala Sitharaman highlighted the importance of RRBs’ continued focus on flagship schemes and the significance of improving their financial metrics. The push towards digitalization and strengthening ties with MSME clusters underscores the government’s commitment to fostering inclusive and sustainable economic growth in the southern region and across the country.
