{"id":212938,"date":"2022-11-03T20:38:10","date_gmt":"2022-11-03T15:08:10","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=212938"},"modified":"2022-11-04T06:39:34","modified_gmt":"2022-11-04T01:09:34","slug":"unprofitable-growing-bad-assets-the-tale-of-existential-crisis-at-rrbs","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/unprofitable-growing-bad-assets-the-tale-of-existential-crisis-at-rrbs\/","title":{"rendered":"Unprofitable, growing bad assets: The tale of existential crisis at RRBs"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cUnprofitable, growing bad assets: The tale of existential crisis at RRBs\u201d <\/strong>published in the Business Standard <\/strong>on 3rd November 2022<\/strong>.<\/p>\n

Syllabus: <\/strong>GS3- India Economy<\/p>\n

Relevance<\/strong>– Financial institutions<\/p>\n

News- <\/strong>The article explains the concept of RRBs. It also explains the financial condition of RRBs.<\/p>\n

What are RRBs?<\/strong><\/p>\n

RRBs are jointly owned by the central government, state governments and sponsoring banks.<\/p>\n

They were set up in 1975 with the intent of bringing financial services and products to agricultural workers and labourers.<\/p>\n

What are the steps taken by the government for RRBs?<\/strong><\/p>\n

Last month, the finance ministry issued draft guidelines setting the criteria for the listing of regional rural banks on the stock exchange.<\/p>\n

The guidelines included listing banks that have earned an operating profit<\/strong> of more than Rs 15 crore in three out of the past five financial years, a net worth<\/strong> of Rs 300 crore and a capital adequacy ratio <\/strong>above the required 9 per cent in the past three years.<\/p>\n

The government has amalgamated various standalone RRBs at different points in time to cut overhead costs. A decade ago, there were 82 RRBs. Since then, their number has reduced to 43.<\/p>\n

What is the financial condition of RRBs?<\/strong><\/p>\n

There has been a steady decline in the number of profit-making RRBs from 75 in FY11 to 34 in FY22. Only 20 have made a profit of over Rs 15 crore in the past three years.<\/p>\n

Between FY11 and FY22, net NPAs<\/strong> have doubled from 2.05% to 4.68%.<\/p>\n

Agriculture sector borrows more from commercial banks than the RRBs. The share of institutional credit<\/strong> by the commercial banks for agriculture and allied activities has increased from 65 per cent to 76% between FY11 and FY22. While, the share of RRBs in the total credit has remained constant between 11 per cent and 13 per cent.<\/p>\n

In FY22, institutional credit<\/strong> in the RRBs marginally declined to 11% from 12% in the previous year.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cUnprofitable, growing bad assets: The tale of existential crisis at RRBs\u201d published in the Business Standard on 3rd November 2022. Syllabus: GS3- India Economy Relevance– Financial institutions News- The article explains the concept of RRBs. It also explains the financial condition of RRBs. What are RRBs? RRBs… Continue reading Unprofitable, growing bad assets: The tale of existential crisis at RRBs<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,216],"class_list":["post-212938","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/212938","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=212938"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/212938\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=212938"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=212938"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=212938"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}