Itanagar, Sep 30: Union Finance Minister Nirmala Sitharaman chaired a pivotal meeting today to review the performance of seven Regional Rural Banks (RRBs) in the Northeast region, encompassing Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura. The meeting was attended by key stakeholders, including the Secretary of the Department of Financial Services (DFS), Executive Director of the Reserve Bank of India (RBI), Chairpersons of the RRBs, and representatives from sponsor banks, including the Chairman of SBI and the Managing Director of PNB.
The agenda focused on enhancing business performance, upgrading digital technology services, and promoting growth in agriculture and micro and small industries. Acknowledging the essential role of RRBs in bolstering the rural economy, Sitharaman urged the banks, with support from their sponsor banks, to increase credit disbursement under various flagship Government of India schemes such as MUDRA and PM Vishwakarma.
Emphasizing the importance of agricultural finance, the Finance Minister directed RRBs to elevate their share in ground-level agriculture credit disbursement, particularly in horticulture, floriculture, and allied activities such as piggery, goatery, sericulture, and fisheries. She instructed NABARD to promote Farmer Producer Organizations (FPOs) in the Northeast and highlighted the Krishi Udan Scheme, which facilitates access to national markets for perishable horticultural and floricultural produce from the region.
To maximize potential in allied agriculture, Sitharaman called for special State Level Bankers’ Committees (SLBCs) meetings involving RRBs. These meetings will explore opportunities in horticulture, floriculture, sericulture, and animal husbandry, address the availability of land records for extending agricultural credit, and enhance funding for agri-processing units. She also urged states to establish mobile veterinary units in each district to support farmers.
The Finance Minister commended RRBs for their improved financial performance and technological upgrades since regular reviews commenced in 2022. Notably, the consolidated Capital to Risk-weighted Assets Ratio (CRAR) stood at a healthy 15% for FY 2024, with profitability rising from a loss of ₹11 crore in FY 2023 to a net profit of ₹205 crore in FY 2024. The Gross Non-Performing Assets (GNPA) ratio also improved from 15.6% in FY 2022 to 7.3% in FY 2024.
Sitharaman directed RRBs, with the backing of sponsor banks and NABARD, to establish new branches in underserved districts, particularly in Nagaland and Arunachal Pradesh. Additionally, she instructed sponsor banks to assist Nagaland Rural Bank in addressing its net worth issues to facilitate the launch of internet banking services.
Highlighting the crucial role of RRBs in financial inclusion, Sitharaman urged them to continue their efforts in achieving saturation under various financial inclusion schemes, such as the Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), and Atal Pension Yojana (APY). She emphasized that every eligible individual in the Northeast should be covered under the PMJDY and praised the exemplary work of Banking Correspondents in Tripura for extending financial inclusion and credit-related schemes to the local population.
To enhance the penetration of Micro, Small, and Medium Enterprises (MSMEs), the Finance Minister urged RRBs to develop tailored MSME products and leverage their local connections. She also called on state governments to open Unity Malls across all Northeast states to promote the sale of One District One Product (ODOP) and other notable regional products. Furthermore, she directed the DFS to coordinate with the Ministry of Development of North Eastern Region (DoNER) and the North Eastern Council (NEC) to explore credit extension possibilities for ODOP initiatives and the establishment of Unity Malls.
