(MENAFN- IANS) New Delhi, Aug 19 (IANS): Finance Minister Nirmala Sitharaman, at a meeting held here on Monday, told the chiefs of Regional Rural Banks (RRBs) to adopt a policy of active outreach in MSME clusters to ensure credit is extended to small and micro enterprises.
The meeting was attended by the Secretary-Designate, Department of financial Services (DFS and other senior officials from the ministry, representatives of the RBI, the SIDBI, the NABARD, Chairpersons of RRBs and CEOs of sponsor banks.
The meeting focused on business performance, upgrading digital technology services, and fostering business growth in MSME clusters which have a huge potential for creating jobs.
The Finance Minister emphasised the need for an active outreach by the RRB branches located in MSME clusters to ensure credit to small and micro enterprises in areas like textile, handicrafts, wooden furniture, clay pots, jute handicrafts, leather, food processing, dairy farming, packing materials etc. that hold immense potential for increasing the loan portfolio for RRBs.
She exhorted all the RRBs to devise suitable MSME products aligning with their cluster activities and leverage personal and local connections to increase banking penetration.
The SIDBI was directed to assist RRBs in exploring co-lending/risk-sharing models and extending refinance for the MSME portfolio. During a presentation in the review meeting, Sitharaman appreciated the RRBs for the improvement in their financial performance and technology upgrades ever since the regular review was initiated in 2022 and also urged the rural banks to continue the momentum in the future.
RRBs have recorded the highest-ever consolidated net profit of Rs 7,571 crore in FY 2023-24.
The Gross Non-Performing Assets (NPA) ratio of 6.1 per cent is the lowest in the previous 10 years.
The Finance Minister underlined that all RRBs must have their own up-to-date technology stack to stay relevant and noted that digital banking services like mobile banking will be a boon for regions like the northeastern states and hilly areas with relatively challenging physical connectivity. The sponsor banks have a significant role in these endeavours by providing technical assistance, sharing best practices, and ensuring that RRBs have access to the resources they need to succeed, she added.
Sitharaman also asked the sponsor banks and the RRBs to recognise the challenges that lie ahead and to continue focusing on maintaining asset quality, expanding digital services, and ensuring robust corporate governance.
MENAFN19082024000231011071ID1108576263
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.