Union Finance Minister Nirmala Sitharaman has instructed the Regional Rural Banks (RRBs) in the Northeast to enhance their contribution to agricultural credit, particularly in horticulture and related activities like piggery, poultry, dairy, and fisheries. This directive was given during a review meeting with RRBs in the northeastern states. The focus is on identifying suitable beneficiaries for loans under various central schemes.

Sitharaman emphasised the importance of the Krishi Udan Scheme, which facilitates access to national markets for perishable horticulture and floriculture products. She urged stakeholders to maximise the potential of allied agricultural activities in the region. Additionally, she called for special state-level bankers’ committee meetings involving RRBs to explore opportunities in horticulture, floriculture, sericulture, and animal husbandry.

Focus on Financial Inclusion and Technology

The Finance Minister praised the RRBs for their role in financial inclusion and encouraged them to continue efforts towards achieving targets under schemes like Jan Dhan Yojana, Jeevan Jyoti Bima Yojana, Suraksha Bima Yojana, and Atal Pension Yojana (APY). She noted the commendable work of banking correspondents in Tripura. Sitharaman also highlighted the need for RRBs to develop MSME products that align with local activities.

She acknowledged improvements in RRBs’ financial performance and technology upgrades. The consolidated Capital to Risk-weighted Assets Ratio (CRAR) reached 15% in FY24, indicating healthy levels. Despite losses of Rs 11 crore in FY23, a net profit of Rs 205 crore was achieved in FY24. Gross Non-Performing Assets (GNPA) improved from 15.6% in FY22 to 7.3% in FY24.

Enhancing Credit Access and Infrastructure

Sitharaman directed NABARD to promote Farmer Producer Organisations (FPOs) in the region. She also urged states to ensure mobile veterinary units are available in each district. The meeting discussed resolving land record issues for extending agricultural credit and increasing credit for agri-processing units.

RRBs were instructed to open new branches in uncovered districts, especially in Nagaland and Arunachal Pradesh, with support from sponsor banks and NABARD. The sponsor bank was tasked with assisting Nagaland Rural Bank to address its net worth issue for launching internet banking services.

Exploring New Opportunities

The minister directed the Department of Financial Services to collaborate with the Ministry of Development of North Eastern Region and the North Eastern Council. This collaboration aims to explore credit extension possibilities for the One District One Product scheme and establish unity malls promoting local products.

The meeting also focused on business performance, digital technology service upgrades, and fostering growth in allied agriculture and MSME clusters. Attendees included chairpersons of RRBs and sponsor banks, representatives from RBI, NABARD, SIDBI, and senior officers from all northeastern states.

Sitharaman’s directives aim to boost agricultural credit disbursement while enhancing financial inclusion through targeted schemes. By leveraging technology upgrades and exploring new opportunities, RRBs can significantly contribute to regional development.