FM Sitharaman urges 7 regional rural banks of NE to raise credit under GoI flagship schemes

Union Finance Minister Nirmala Sitharaman on Monday urged the seven Regional Rural Banks (RRBs) of the northeastern region to increase credit disbursement under various government of India flagship schemes such as MUDRA, PM Vishwakarma. 

The Union Finance Minister while chairing a meeting in Itanagar to review the performance of seven RRBs of the northeastern region said that the focus should be on credit for agriculture, horticulture and allied activities like piggery, goatery, sericulture, fisheries etc.

She also directed NABARD to promote FPOs (Farmer Producer Organisations) in the NE region.

Out of the 43 RRBs across the country, there are seven RRBs in the northeast region covering the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura.

Given the crucial role of RRBs in supporting the rural economy, Sitharaman urged RRBs – with the active support of their sponsor banks – to increase credit disbursement under various Central government flagship schemes such as MUDRA, PM Vishwakarma, etc.

During the review meeting, the Union Finance Minister was apprised of the improvement in the financial performance of the RRBs of the northeast region and their technology upgradation ever since the regular review was initiated in 2022.

The Consolidated Capital to Risk (Weighted) Assets Ratio (CRAR) of 15 per cent in Financial Year 2024 is at healthy levels and profitability has improved from losses of Rs 11 crore in FY 2023 to net profit of Rs 205 crore in FY 2024.

The Gross Non-Performing Assets (GNPA) have also improved from 15.6 per cent in FY 2022 to 7.3 per cent in FY 2024, an official statement said.

Sitharaman also urged stakeholders to hold special State Level Bankers' Committees (SLBCs) meetings involving RRBs to explore the possibility of tapping the potential of horticulture, floriculture, sericulture and animal husbandry in the northeastern states, resolve the issue of availability of land records for extending Agri credit and increasing credit for agri-processing units.

The statement said that states were urged to ensure the provision of mobile veterinary units in each district.

During the meeting, the central minister emphasised that every eligible person in the northeast region should get covered under the Pradhan Mantri Jan Dhan Yojana (PMJDY).

The Union Finance Minister directed the Department of Financial Services (DFS) to conduct a meeting with the Ministry of DoNER and North Eastern Council to explore the possibilities for extending credit to ODOP vendors of the states.

She also advised that all RRBs must devise suitable MSME products that align with MSME activities and leverage their personal and local connections to increase penetration.

RRBs, with necessary support from sponsor banks and NABARD, were also directed to open new banking touch points in non-covered areas, especially in the states of Nagaland and Arunachal Pradesh.

M. Nagaraju, Secretary, DFS, Chairpersons of seven RRBs and sponsor banks -- Chairman, SBI and Managing Director, PNB, representatives of RBI, NABARD and SIDBI and senior officers of the Finance Ministry and seven northeastern states were also present during the meeting.