Regional Rural Banks Experience Significant Growth with Record Profits: Government
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Synopsis
The financial status of Regional Rural Banks has markedly improved, achieving a record net profit of Rs 7,571 crore in FY 2023-24. Key performance indicators show positive trends in NPAs, deposits, and credit ratios, highlighting the sector's resilience and commitment to financial inclusion.
Key Takeaways
- RRBs achieved a record net profit of Rs 7,571 crore.
- Net NPA decreased from 4.7% to 2.4%.
- Total balance sheet size grew from Rs 7,04,556 crore to Rs 8,40,080 crore.
- Credit to Deposit Ratio increased from 64.5% to 71.4%.
- Government emphasizes financial inclusion in rural areas.
New Delhi, March 25 (NationPress) The financial condition of the Regional Rural Banks (RRBs) has significantly improved in recent years, having achieved an unprecedented consolidated net profit of Rs 7,571 crore during FY 2023-24, as reported to Parliament on Tuesday.
RRBs have consistently demonstrated enhancements in crucial financial metrics such as NPAs, deposits, advances, and the credit-deposit ratio.
The total balance sheet size of RRBs has surged from Rs 7,04,556 crore in FY 2021-22 to Rs 8,40,080 crore in FY 2023-24. Additionally, the Net NPA has decreased from 4.7 percent in FY 2021-22 to 2.4 percent in FY 2023-24. Furthermore, the Credit to Deposit Ratio has risen from 64.5 percent to 71.4 percent during this timeframe, as stated by Minister of State for Finance Pankaj Chaudhary in a written reply to the Rajya Sabha.
He also mentioned that the government conducts evaluations of the financial performance of RRBs at both national and regional levels. It monitors the focus on the Micro, Small, and Medium Enterprise (MSME) sector and emphasizes loan diversification towards agri-allied, MSME, and retail sectors, according to the minister.
The government has also assessed the advancements made by RRBs in enhancing financial inclusion in rural and remote regions by reviewing performance across various financial inclusion initiatives such as Pradhan Mantri Jan Dhan Yojana, Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, and Atal Pension Yojana, he further elaborated.
Founded under the Regional Rural Banks Act, 1976, to deliver banking services in rural areas and foster rural development, RRBs are co-owned by the Central government (50 percent), state government (15 percent), and the sponsoring bank (35 percent).
The RBI, via the Banking Regulation Act, 1949, establishes the overarching policy for banking operations and ensures the stability and soundness of the financial system, including RRBs.
NABARD, under Section 35(6) of the Banking Regulation Act, 1949, is tasked with conducting statutory inspections of RRBs, State Cooperative Banks, and District Central Cooperative Banks.
