FM asks RRBs to devise suitable products aligning with MSME clusters

NEW DELHI : Finance Minister Smt. Nirmala Sitharaman on Monday asked Regional Rural Banks (RRBs) to devise suitable products aligning with MSME clusters to increase banking penetration.

During a review meeting with chairpersons of RRBs and CEOs of their sponsored bank, the finance minister emphasised active outreach by the RRB branches located in MSME clusters to ensure credit to small and micro enterprises in areas like textile, wooden furniture, leather, food processing, packing materials etc. that hold immense potential for increasing the loan portfolio.

Sitharaman also asked sponsor banks and RRBs to recognise the challenges ahead and continue focusing on maintaining asset quality, expanding digital services, and ensuring robust corporate governance.

During the meeting, Sitharaman underlined that all RRBs must have their own up-to-date technology stack to stay relevant and noted that digital banking services like mobile banking will be a boon for regions with relatively challenging physical connectivity (like northeastern states and hilly regions).

The sponsor banks have a significant role in these endeavours by providing technical assistance, sharing best practices, and ensuring that RRBs have access to the resources they need to succeed, an official statement issued after the meeting said.

Given the crucial role of RRBs in supporting the rural economy, she urged RRBs to also put greater thrust on the clear identification of beneficiaries while sanctioning loans under various schemes like PM Vishwakarma and PM Surya Ghar Muft Bijli Yojana.

RRBs were also directed to increase their share in ground-level agriculture credit disbursement, it said.