FM Nirmala Sitharaman Urges RRBs to Enhance Credit Delivery for Government Schemes in Northeast

Finance Minister Nirmala Sitharaman has urged Regional Rural Banks (RRBs) to boost credit distribution in the Northeast under key government schemes like MUDRA and PM Vishwakarma. The emphasis is on financing agriculture, horticulture, and related sectors such as piggery, goatery, sericulture, and fisheries. These directives were issued during a meeting in Itanagar to assess the performance of seven RRBs operating in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura.

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The finance minister also instructed the National Bank for Agriculture and Rural Development (NABARD) to promote Farmer Producer Organizations (FPOs) in the Northeast. This initiative aims to enhance agricultural productivity and support rural economies. The finance ministry highlighted these points in an official statement following the meeting.

Focus on Financial Performance and Technology

During the review session, improvements in the financial health of Northeast RRBs were noted. Since regular reviews began in 2022, there has been significant progress. The Consolidated Capital to Risk-weighted Assets Ratio (CRAR) reached a robust 15% in FY24. Additionally, profitability improved from a loss of Rs 11 crore in FY23 to a net profit of Rs 205 crore in FY24.

The Gross Non-Performing Assets (GNPA) ratio also showed positive trends, decreasing from 15.6% in FY22 to 7.3% in FY24. These advancements reflect the ongoing efforts to strengthen the financial stability and technological capabilities of RRBs in the region.

Expanding Credit Access and Infrastructure

Sitharaman stressed the importance of ensuring that every eligible individual in the Northeast is covered under the Pradhan Mantri Jan Dhan Yojana (PMJDY). She directed the Department of Financial Services to collaborate with the Ministry of DoNER and North Eastern Council (NEC) to explore credit opportunities for ODOP vendors across states.

The minister encouraged stakeholders to convene special State Level Bankers Committees (SLBCs) meetings with RRBs. These meetings should focus on harnessing potential in horticulture, floriculture, sericulture, and animal husbandry sectors. Resolving land record availability issues for agricultural credit extension was also emphasized.

Enhancing MSME Products and Banking Reach

Sitharaman advised RRBs to develop suitable products for Micro, Small, and Medium Enterprises (MSMEs). By leveraging local connections and support from sponsor banks and NABARD, RRBs can increase their market penetration. Additionally, new banking touchpoints should be established in underserved areas, particularly in Nagaland and Arunachal Pradesh.

States were urged to ensure mobile veterinary units are available in each district. This measure aims to support animal husbandry activities by providing necessary veterinary services promptly.

The meeting underscored the need for RRBs to align their offerings with local needs while expanding their reach. By focusing on agriculture-related sectors and enhancing financial inclusion efforts, RRBs can play a pivotal role in supporting rural development across the Northeast region.