Pre-cum-Mains GS Foundation Program for UPSC 2026 | Starting from 5th Dec. 2024 Click Here for more information
News
- Regional Rural Banks(RRB) are facing capital crunch because of worsening balance sheets of sponsor banks and the apathy of Central and State governments.
Important Facts
- RRBs were introduced in 1975 as a low-cost model to ensure credit availability to rural population.
- In past RRBs have been able to meet rural credit-delivery targets but these days they are facing problems in raising capital which is affecting their functioning.
- Raising capital from the market would hurt their low cost functioning.
Consolidation of RRBs
- First round of consolidation of RRBs was done in 2004-05.
- The second round was done in 2011-12 and the number of RRBs was declined from 196 to 56.
- The present government is thinking of third round of consolidation to enhance their capital base and to increase rural lending.
NABARD’s suggestion: extension of recapitalization support to RRBs and the capital raising by strong RRbs.
Discover more from Free UPSC IAS Preparation For Aspirants
Subscribe to get the latest posts sent to your email.
