The Union government’s plan to recapitalize 40 of the 82 regional rural banks (RRBs) is at risk as some of the state governments are either delaying or refusing to pay their share of money. Due to this, the government has only been able to recapitalize around 12 RRBs, with the stakeholders collectively infusing Rs. 300 crore. The cabinet had approved the Rs. 2,200 crore recapitalization plan of 40 RRBs in February,...
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Banks told to integrate operations with Regional Rural Banks for rural lending by Dheeraj Tiwari
In an attempt to extend the reach of banks in rural and semi-urban areas, the finance ministry has asked public sector banks to integrate their operations with regional rural banks (RRBs). "Charges for various banking services used by customers of RRBs are to be aligned with the sponsoring banks," a finance ministry official said on condition of anonymity. "Further, cheques or drafts issued by RRBs should be treated at par...
More »Farm loans up in 2010-11; low enlistment of new borrowers a concern
-The Economic Times Farm credit flow has registered a quantum jump during 2010-11, accordign to figures put out by the government, although apprehensions have been expressed that there is urgent to enlist new loanees rather than give credit to time and again to the same borrowers. Credit institutions disbursed Rs. 4,26,531 crore during the year against the target of Rs.3,75,000 crore, an official statement said here. Agency-wise, Commercial Banks with...
More »Nabard objects to proposal on business houses taking over RRBs by Dinesh Unnikrishnan
Even before the Reserve Bank of India (RBI) finalizes the guidelines for handing out new bank licences, its draft proposal has evoked unease in the National Bank for Agriculture and Rural Development (Nabard), which oversees the country’s 82 regional rural banks (RRBs). Nabard has taken exception to the banking regulator’s proposal to allow industrial houses to take over RRBs and convert them into full-fledged banks, saying such a move could dilute...
More »How ‘rural' is India's agricultural credit? by Pallavi Chavan
One of the most intriguing features of India's agrarian economy in recent years is the persistence of agrarian distress in many regions, even while agricultural credit flow has risen sharply. Rising flow of credit to agriculture is normally associated with buoyancy in the farm sector. A closer look at the data on agricultural credit reveals that what is termed agricultural credit may have very little to do with agriculture, the...
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