FM Urges Regional Rural Banks To Improve CASA Ratio, Increase Digital Banking

Finance Minister Nirmala Sitharaman emphasized improving the current and savings account (CASA) ratio of regional rural banks (RRBs) in a meeting on August 4. The FM chaired a meeting with chairpersons and senior officials of RRBs from the Southern Region in Chennai, discussing critical measures for the improvement of these banks.

During the meeting, Sitharaman highlighted that the CD Ratio, Gross NPAs, and Provision Coverage Ratio (PCR) of Regional Rural Banks of the Southern region were better than the national average, and she exhorted the RRBs and Sponsor Banks to improve Current and Savings Account (CASA) Ratio of RRBs.

She stressed that the Regional Rural Banks should continue their focus on the flagship schemes of the Central Government such as Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, PM SVANidhi, Atal Pension Yojana, PM Jan Dhan Yojana, PM Mudra Yojana, Kisan Credit Cards (KCC), KCC Animal Husbandry & Fisheries, etc and aim for their saturation.

Further, she said, " RRBs should focus on increasing digitally active customers in line with the government's effort to move towards greater digitalisation."

Moreover, she also stated that better adoption of technology, Loan Management System and Core Banking System should be done in a time-bound manner in the RRBs of the Southern region.

Also, she recommended that Sponsor Banks should map RRBs with MSME clusters and improve their presence in these clusters while devising innovative products for the MSME to serve them in a better way. She exhorted RRBs from the region to work closely with the RBI and State Authorities concerned to improve their physical presence across the state.

She also highlighted leveraging the Account Aggregator Framework, especially for lending to the Allied agricultural sector like fisheries and animal husbandry, besides granting loans to street vendors under the PM SVANidhi scheme.

Notably, the meeting was attended by the secretary Department of Financial Services Dr Vivek Joshi and senior RBI officials. Finance Secretary of Tamil Nadu T. Udhayachandran, Secretaries and senior officers from state Finance Ministries of Andhra Pradesh, Telangana, Kerala, Puducherry and Karnataka were present at the meeting. The Managing Directors and CEOs of State Bank of India, Indian Bank, Union Bank of India, Canara Bank, Indian Overseas Bank and NABARD also took part in the discussions.