FM urges regional rural banks to raise credit disbursement

Finance minister Nirmala Sitharaman on Saturday urged regional rural banks, or RRBs, to increase credit disbursement under various central government schemes such as Mudra and PM Vishwakarma with the active support of their sponsor banks.

The finance minister reviewed the performance of 10 RRBs of the southern region, including Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana and Puducherry. She directed them to increase their share in ground-level agriculture credit disbursement with special focus on allied agriculture activities like dairy, animal husbandry, and fisheries, the finance ministry said in a statement.

Sitharaman acknowledged the role of RRBs in supporting the rural economy, and reinforced the need for RRBs in the southern region to mobilise CASA deposits to further accelerate the pace of sustainable credit growth.

She also directed sponsor banks to rework the targets of financial inclusion schemes along with RRBs and asked banks to launch special drives to operationalise inoperative accounts under PM Jan Dhan Yojana, the statement noted.

“Specific emphasis was placed on reinforcing credit support to MSMEs and streamlining customer onboarding processes through digital innovations,” it said, adding that RRBs in the southern region have posted consolidated profit of ₹3,816 crore during FY24, which is more than 50% of net consolidated profit of all RRBs combined.