Finance Minister reviews performance of North East Regional Rural Banks, calls for increased credit support

Itanagar, 30 September: Union Minister for Finance and Corporate Affairs Nirmala Sitharaman chaired a meeting in Itanagar today to review the performance of 7 Regional Rural Banks (RRBs) in the North East Region, covering the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura. M. Nagaraju, Secretary of the Department of Financial Services (DFS), Chairpersons of RRBs and sponsor banks (Chairman of SBI and Managing Director of PNB), senior officials from the Department of Financial Services, representatives from RBI, NABARD, SIDBI, and senior officers from the 7 states were present at the meeting.

During the review, the Union Finance Minister was briefed on the improved financial performance of the Northeast RRBs and their technological upgrades since regular reviews began in 2022. The Consolidated CRAR stood at a healthy 15% in FY 2024, and profitability improved from losses of Rs. 11 crore in FY 2023 to a net profit of Rs. 205 crore in FY 2024. Gross Non-Performing Assets (GNPA) also improved from 15.6% in FY 2022 to 7.3% in FY 2024.

Recognizing the crucial role of RRBs in supporting the rural economy, the Union Finance Minister urged RRBs, with support from their sponsor banks, to increase credit disbursement under various Government of India flagship schemes such as MUDRA and PM Vishwakarma. Emphasis was placed on credit for agriculture, horticulture, and allied activities such as piggery, goatery, sericulture, and fisheries. The Minister also directed NABARD to promote Farmer Producer Organizations (FPOs) in the Northeast region.

Additionally, the Union Finance Minister encouraged stakeholders to convene special State Level Bankers’ Committees (SLBCs) involving RRBs to explore the potential of horticulture, floriculture, sericulture, and animal husbandry in the Northeastern states. She stressed the importance of resolving issues related to the availability of land records for extending agricultural credit and increasing credit for agri-processing units. States were urged to ensure the provision of mobile veterinary units in each district.

During the meeting, Sitharaman emphasized the need to ensure that every eligible person in the Northeast region is covered under the Pradhan Mantri Jan Dhan Yojana (PMJDY). The Union Finance Minister instructed the DFS to hold a meeting with the Ministry of DoNER and NEC (North Eastern Council) to explore options for extending credit to ODOP (One District One Product) vendors in the states. Sitharaman also advised all RRBs to develop suitable MSME products aligned with MSME activities and utilize their local connections to increase penetration.

Finally, RRBs, supported by Sponsor Banks and NABARD, were directed to establish new banking touchpoints in uncovered areas, particularly in Nagaland and Arunachal Pradesh. (PIB)

MT