Finance Minister Nirmala Sitharaman reviewed the performance of 10 Regional Rural Banks (RRBs) from the Southern Region in Bengaluru on Saturday. This review covered RRBs operating across Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Kerala and the Union Territory of Puducherry, according to a social media post by the Ministry of Finance.

Union Minister of State for Finance Pankaj Chaudhary, the Secretary of the Department of Financial Services (DFS), senior officials from DFS, representatives from state governments, SIDBI, NABARD, sponsor banks, and other RRB stakeholders attended the meeting. Sitharaman has been conducting these performance reviews to support RRBs’ pivotal role in the rural economy.

In a previous August meeting in Delhi, Sitharaman urged RRBs and their sponsor banks to emphasise accurate beneficiary identification when sanctioning loans under initiatives like PM Vishwakarma and PM Surya Ghar Muft Bijli Yojana. She also directed RRBs to increase their involvement in ground-level agriculture credit distribution.

During the recent review, Sitharaman commended RRBs on their improved financial performance and technology enhancements since the regular reviews began in 2022, encouraging continued progress. She highlighted the need for all RRBs to maintain updated technology systems, noting that digital banking services, such as mobile banking, are especially beneficial for areas with limited physical connectivity, like the North East and mountainous regions. Sponsor banks play a crucial role here by providing technical support, sharing best practices, and ensuring access to necessary resources.

The Union Finance Minister further emphasised outreach by RRB branches in MSME hubs to enhance credit access for small businesses in sectors like textiles, handicrafts, and dairy farming, which offer significant potential for RRBs’ loan portfolio growth. She urged RRBs to develop MSME-focused products tailored to these clusters and leverage local connections to expand banking services. She also directed SIDBI to help RRBs explore co-lending and risk-sharing models and provide refinance options for MSME loans.

Sitharaman concluded by urging sponsor banks and RRBs to address upcoming challenges, focusing on asset quality, expanding digital services, and maintaining strong corporate governance.

(With inputs from ANI)