To ensure financial stability of Regional Rural Banks, the Cabinet Wednesday approved extension of recapitalisation scheme for RRBs for next three years up to 2019-20 to help them maintain their minimum capital adequacy ratio. The scheme started in 2010-11 and was extended twice in 2012-13 and 2015-16. The last extension was up to March, 2017.
Rs 1,107.20 crore, as government’s share, out of Rs 1,450 crore, has been released to RRBs till March last year. The remaining Rs 342.80 crore will be utilised to provide recapitalisation support to RRBs whose Capital to Risk Weighted Assets Ratio is below 9 per cent, during 2017-18, 2018-19 and 2019-20.
“A strong capital structure and minimum required level of CRAR will ensure financial stability of RRBs which will enable them to play a greater role in financial inclusion and meeting the credit requirements of rural areas,” the statement said.
Identification of RRBs requiring recapitalisation and the amount of capital will be decided in consultation with National Bank for Agriculture and Rural Development.
There were 56 functioning RRBs with total credit outstanding of Rs 2.28 lakh crore as on March 31, 2017.