On Monday, Finance Minister Nirmala Sitharaman urged Regional Rural Banks (RRBs) to develop tailored products that align with MSME clusters to enhance banking penetration. During a review meeting with RRB chairpersons and CEOs of their sponsoring banks, the finance minister highlighted the importance of proactive outreach by RRB branches situated in MSME clusters. She emphasized the need to ensure credit availability for small and micro enterprises in sectors such as textiles, wooden furniture, leather, food processing, and packaging materials, which have significant potential to expand the loan portfolio.
Finance Minister Nirmala Sitharaman also urged sponsor banks and Regional Rural Banks (RRBs) to recognize upcoming challenges and maintain a focus on asset quality, expanding digital services, and ensuring robust corporate governance. During the meeting, she emphasized the necessity for all RRBs to have an up-to-date technology stack to remain relevant. She noted that digital banking services, such as mobile banking, would be particularly beneficial for regions with challenging physical connectivity, including northeastern states and hilly areas.
According to an official statement issued after the meeting, sponsor banks play a crucial role in these efforts by providing technical assistance, sharing best practices, and ensuring that RRBs have access to the necessary resources for success. Given the vital role of RRBs in supporting the rural economy, Sitharaman urged them to place greater emphasis on clearly identifying beneficiaries when sanctioning loans under various schemes, such as PM Vishwakarma and PM Surya Ghar Muft Bijli Yojana.