FM Sitharaman urges regional rural banks to onboard customers to digital services like mobile banking by Dec 2024

Union Finance Minister Nirmala Sitharaman has urged Regional Rural Banks (RRBs) to onboard rural customers to digital services such as Internet Banking, Mobile Banking, and UPI.

The minister emphasized the importance of digital inclusion during a review meeting held in Patna on Friday with eight RRBs from Bihar, Jharkhand, Odisha, and West Bengal.

In the meeting, Sitharaman directed the RRBs to prioritize onboarding customers for digital services and set a deadline to complete this task by December 2024. She also encouraged the RRBs to promote digital adoption among their customers with support from their sponsor banks.

“RRBs to prioritize onboarding customers to digital services like Internet Banking, Mobile Banking, and UPI. RRBs should promote digital adoption with the help of sponsor banks to enhance usage,” she said.

The finance minister reviewed the business performance, digital upgrades, and new credit products offered by RRBs, focusing on inclusive growth. She highlighted the importance of increasing credit flow, especially to activities allied to agriculture and micro and small industries, to foster business growth.

Sitharaman also stressed the need to enhance credit flow to women’s self-help groups (SHGs). She urged state governments to collaborate with NABARD and SIDBI to help SHGs evolve into enterprises.

She pointed out the potential of the One District One Product (ODOP) program to boost self-employment opportunities in the region and directed financial institutions to provide training and marketing support to SHGs.

The minister emphasized the need for technology upgrades to improve efficiency and service delivery in RRBs. She acknowledged the improvement in the financial health of RRBs, with the consolidated CRAR improving from 7.8 per cent in FY22 to 9.4 per cent in FY24 and Gross NPAs reducing from 25 per cent in FY22 to 15 per cent in FY24.

The minister said “RRBs in Eastern Region have posted consolidated profit of Rs 625 crore during FY 2024 against net loss of Rs. 690 crore in FY 2023”.

Sitharaman concluded by highlighting the need to maintain asset quality, expand digital services, and ensure strong corporate governance in RRBs to address future challenges.