 "Nirmala Sitharaman")
Finance minister Nirmala Sitharaman is likely to meet heads of Regional Rural Banks (RRBs) and review their performance soon, sources said.
RRBs play an important role in financial inclusion and serving the credit needs of rural economy.
According to sources, the finance minister would review the progress with regard to issuance of Kisan Credit Card (KCC) to farm and allied sector by RRBs.
With an aim to provide the benefits of KCC loans to maximum number of farmers, a special KCC saturation drive was launched under Atma Nirbhar Bharat Abhiyan to cover 2.5 crore farmers under KCC with a credit boost of Rs 2 lakh crore.
She is also expected to review capital position of some of the weak RRBs, sources added.
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The need for technology upgradation of RRBs, strategies for NPA reduction, IT initiatives, improving financial inclusion, enhancing credit delivery to rural areas and support being given by sponsor banks to the RRBs are other issues that may be discussed in the meeting, it added.
These banks were formed under the RRB Act, 1976 with an objective to provide credit and other facilities to small farmers, agricultural labourers and artisans in rural areas.
Currently, the Centre holds 50 per cent stake in RRBs, while 35 per cent and 15 per cent are with the concerned sponsor banks and state governments, respectively.
Earlier during the day, Sitharaman had a meeting with CEOs of public sector banks.
She reviewed financial performance and also took stock of the progress made by banks in achieving targets set for various government schemes, including PM Street Vendor's Atma Nirbhar Nidhi (PM SVANidhi), Stand-Up India, Pradhan Mantri Mudra Yojana (PMMY), Atal Pension Yojana and emergency credit line guarantee scheme (ECLGS) to help businesses affected by Covid-19.
The finance minister would review credit growth, asset quality, and capital raising and business growth plan of banks for the next financial year, sources said, adding non-performing assets (NPAs) of Rs 100 crore and the recovery status would also be discussed.
As per the latest Financial Stability Report (FSR), the gross non-performing assets (GNPAs) ratio for banks fell further to a ten-year low of 3.9 per cent as of March 2023. The central bank said the GNPAs are expected to improve further to 3.6 per cent in the baseline scenario.
Last week, the finance minister said banks need to "build on laurels" by following the best corporate governance principles.
"Banks should not sit back and revel in success. They should follow best corporate governance practices, adhere to regulatory norms, ensure prudent liquidity management, and continue to focus on having robust asset-liability and risk management," she had said.
She stressed that the Indian economy has moved away from the 'twin balance sheet problem' to 'twin balance sheet advantage'.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
