Centre asks IBA to ready EASE-like plan for regional rural banks

Source: The post is based on the article “Centre asks IBA to ready EASE-like plan for regional rural banks” published in Business Standard on 10th August 2022.

What is the News?

The Centre has asked the Indian Banks Association(IBA) to prepare a viability plan for Regional Rural Banks(RRBs) similar to the Enhanced Access and Service Excellence (EASE) for public sector banks(PSBs).

What is EASE?

Enhanced Access and Service Excellence(EASE) is a common reform agenda for Public Sector Banks (PSBs). 

It is aimed at institutionalizing clean lending, better customer service, simplified and enhanced credit and robust governance and HR practices. 

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What are the reforms the government is planning for RRBs?

EASE-like Plan for RRBs: Government has asked the Indian Banks Association(IBA) to prepare a viability plan for Regional Rural Banks(RRBs) similar to the EASE plan for public sector banks(PSBs).

Restructure RRBs: The Department of Financial Services(DFS) had formed an expert committee to seek recommendations for making RRBs viable in the medium to long term.

– The panel has recommended operational and governance reforms for RRBs that will be based on the achievement of operational milestones.

– These include credit expansion, business diversification, NPA reduction, cost rationalization, technology adoption and improvement in corporate governance among others.

List RRBs on Stock exchange: The government is looking to list operationally-sound RRBs on the stock exchanges. This move is seen as providing additional sources to meet their regulatory capital requirement.