Rao panel calls for radical revamp of RRBs

The nine-member RRB committee, set up to suggest measures for reviving regional rural banks (RRBs) under the chairmanship of National Bank f...

The nine-member RRB committee, set up to suggest measures for reviving regional rural banks (RRBs) under the chairmanship of National Bank for Agricultural and Rural Development (Nabard) managing director Chalapathy Rao, has favoured a total revamp of the RRB structure.

The panel has also called for consolidation of RRBs to make them viable and profitable. Sources close to the development said that the panel has reached a broad consensus on the matter and is likely to recommend that the government reduce the number of RRBs to around 40 from the present 196.

The panel is also of the view that RRBs should operate as commercial entities. “The present approach should not be there any more. Commercial approach is necessary for their survival,” sources said.

Story continues below this ad

The government set up the Rao panel July last to review RRBs’ operations. The panel comprises representatives from Reserve Bank of India, Nabard and state-run banks.

The panel also favours capital adequacy ratio (CAR) norms for RRBs as in the case of commercial banks but in a staggered manner. “RRBs should also start to broadbase their lending areas. The idea is that they enhance their gamut of services following a commercial approach.”

The panel is expected to hold another meeting next month before submitting its recommendations to the Centre, said the source, adding, “there are several options on how the consolidation can be done. But it does not want to suggest any particular option”. Options include merger of various RRBs following the ‘one-sponsor bank’ approach, Or they can be amalgamated with their sponsor banks.

Bahraich faces new ‘wolf attacks’: 4 children mauled, 16 injured this month

Cities9 min ago

As many as four children have been killed and 16 injured in wild animal attacks, suspected to be wolves, in Uttar Pradesh’s Bahraich district this month — a chilling reminder of similar incidents that haunted the region last year. The body of one of the children is still missing. All those injured are adults, except for one child.

View all shorts

Live Blog

PHOTOS