Finance Minister Nirmala Sitharaman Reviews North East Regional Rural Banks’ Performance
New Delhi [India], October 1: The financial condition of the Regional Rural Banks (RRBs) in the North East region has improved since regular reviews began in 2022, according to the Ministry of Finance. Union Finance Minister Nirmala Sitharaman chaired a key review meeting in Itanagar, Arunachal Pradesh, to assess the performance of seven RRBs from the North Eastern region, including Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura.
The meeting highlighted significant improvements in the financial and technological performance of these RRBs. The Ministry stated, “During the review meeting, the Union Finance Minister was apprised about the improvement in the financial performance of the RRBs of the Northeast and their technology upgradation ever since the regular review was initiated in 2022.”
Recognizing the crucial role of RRBs in bolstering the rural economy, Sitharaman urged these banks and their sponsor banks to enhance credit disbursement under Government of India’s flagship schemes such as PM MUDRA Yojana and PM Vishwakarma Yojana. The focus was on increasing credit for agriculture, horticulture, and allied sectors such as piggery, goatery, sericulture, and fisheries. She also directed NABARD to promote Farmer Producer Organizations (FPOs) in the region.
The RRBs reported a notable turnaround in profitability, with a net profit of Rs. 205 crore in FY 2024, compared to a loss of Rs. 11 crore in FY 2023. The Gross Non-Performing Assets (GNPA) also improved, dropping from 15.6 per cent in FY 2022 to 7.3 per cent in FY 2024.
The meeting saw the participation of key stakeholders, including the Secretary of the Department of Financial Services (DFS), chairpersons of RRBs and sponsor banks, senior officials from RBI, NABARD, and SIDBI, as well as representatives from the seven states.
Sitharaman called for special State Level Bankers’ Committee (SLBC) meetings involving RRBs to explore opportunities in horticulture, floriculture, sericulture, and animal husbandry. She urged states to resolve issues related to land records to facilitate agricultural credit and recommended increased credit support for agri-processing units. Additionally, states were advised to ensure that mobile veterinary units are available in each district.
Sitharaman also emphasized the importance of financial inclusion, directing officials to ensure that every eligible person in the North-East is covered under the Pradhan Mantri Jan Dhan Yojana (PMJDY). She instructed the DFS to collaborate with the Ministry of DoNER and the North Eastern Council (NEC) to explore credit opportunities for ODOP (One District, One Product) vendors in the region.
Finally, the Finance Minister advised RRBs to develop customized MSME products and leverage their local connections to increase penetration. RRBs, with necessary support from Sponsor Banks and NABARD, were also directed to open new banking touchpoints in non-covered areas, especially in the states of Nagaland and Arunachal Pradesh.
Doubts Revealed
Finance Minister -: The Finance Minister is a person in the government who is responsible for managing the country’s money and finances. In India, this person is Nirmala Sitharaman.
Nirmala Sitharaman -: Nirmala Sitharaman is the current Finance Minister of India. She helps make decisions about how the country’s money is spent and saved.
North East -: The North East refers to a region in India that includes states like Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura.
Regional Rural Banks (RRBs) -: Regional Rural Banks are banks that operate in rural areas of India. They help people in villages get loans and other banking services.
Itanagar -: Itanagar is the capital city of Arunachal Pradesh, a state in the North East region of India.
Arunachal Pradesh -: Arunachal Pradesh is a state in the North East region of India. It is known for its beautiful mountains and forests.
Credit disbursement -: Credit disbursement means giving out loans or money to people or businesses. Banks do this to help people start businesses or buy things they need.
Government schemes -: Government schemes are special programs started by the government to help people. These can include things like loans for farmers or money for building houses.
Agriculture and allied sectors -: Agriculture means farming, and allied sectors are related activities like fishing, forestry, and animal husbandry. These are important for growing food and other products.
Net profit -: Net profit is the amount of money a bank or business makes after subtracting all its costs. It shows how well the bank or business is doing.
Rs. 205 crore -: Rs. 205 crore means 205 crore rupees. One crore is equal to 10 million, so 205 crore is a lot of money.
FY 2024 -: FY 2024 means the financial year 2024. A financial year is a 12-month period used for accounting purposes. In India, it usually starts on April 1 and ends on March 31 of the next year.
GNPA -: GNPA stands for Gross Non-Performing Assets. It means the total amount of loans that people or businesses have not paid back to the bank.
Financial inclusion -: Financial inclusion means making sure everyone has access to useful and affordable financial services, like bank accounts and loans.
Banking touchpoints -: Banking touchpoints are places where people can access banking services, like ATMs, bank branches, or mobile banking units.