Regional Rural Banks

Growth of money kept in current accounts moderated to 8.8% this September, from 17.5% a year ago

Scope of their survival is diminishing. Even as the overall business of rural financial institutions has generally been looking up, they are struggling to scale up business volumes

They are mostly loss-making, with growing bad assets so the agricultural sector prefers commercial banks

In a bid to enable regional rural banks (RRBs) to raise resources by listing on stock exchanges, the government has issued draft guidelines that set certain basic criteria, including net worth of at least Rs 300 crore during the previous three years. They should also have capital adequacy above the regulatory minimum level of 9 per cent in each of the preceding three years. The RRBs should have a track record of profitability and earned operating profit of minimum Rs 15 crore for at least three out of the previous five years, according to the draft guidelines issued by the finance ministry recently. Besides, there should not be any accumulated loss and the lender should have given return on equity of minimum 10 per cent in three out of the preceding five years, it said. As per the draft norms, the responsibility of identifying suitable lenders for issuing initial public offering (IPO) has been left with the respective sponsor banks. The sponsor bank would take into account the ...

This scheme was announced in the state Budget 2022-23 to promote micro, small, and medium enterprises (MSMEs), and give loans on easy terms for small businesses and investors

Financially-strong RRBs have been sent reminders to explore listing of their shares on the exchanges to raise capital

The government is also nudging operationally sound RRBs to explore listing on the stock exchanges, creating additional sources to meet their regulatory capital requirement

The Centre's recent move to impose GST on services rendered by the markets regulator, Securities and Exchange Board of India (Sebi), has rattled FPIs

The banks' lobby group has been asked to assist with the preparation of the viability plan for RRBs

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Sponsor banks - that hold about 35 per cent in RRBs - have been asked to handhold regional lenders at all stages from identification of merchant bankers to the conclusion of IPO

The Centre is thinking of allowing RRBs to invest in perpetual debt instruments issued by other banks, including RRBs

The RBI monetary policy committee, in its policy review, decided to permit the rural cooperative banks (RCBs) to finance residential real estate projects

Nabard will work on a viability plan for 22 regional rural banks in the next six months to address issues of capital adequacy, business growth and human resources

In fact, some of the large RRBs are bigger than the SFBs currently operating in the market

As a planned strategy to diversify the portfolio, RRBs expanded their housing loans by 20.35 per cent, while gold loans grew 91.73 per cent

Viability plan includes Rs 2,000-crore infusion

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Move would improve governance, help lenders raise equity from the market

After banks and NBFCs, the Reserve Bank of India (RBI) has now decided to facilitate a more efficient liquidity management in Regional Rural Banks