Page 6 - Banking Finance October 2020

BANK UPDATE

ary cuts at many companies. "Not only the fiscal year ended March 31, 2020, per cent or Rs 2.70 lakh crore of the
are your jobs secure, your increment as against Rs 652-crore net loss in gross loans outstanding of RRBs as on
is secure. Your bonus and your promo- FY19, according to data published by March 31, 2020. Share of agriculture
tion is secure," he told the bank's em- Nabard. and MSME sectors in total loan out-
ployees in a video message last week. During FY 2019-20, 26 RRBs earned standing stood at 70 per cent and 12
He also assured them that the bank profit of Rs 2,203 crore, while 19 in- per cent, respectively, the data
remains well capitalised and that its curred losses of Rs 4,409 crore, the showed.
portfolio is not under any strain. data showed. As of end March 2020, 17 out of the
The data on RRBs, recently published 45 RRBs had capital to risk weighted
Government extends ten- by the National Bank for Agriculture assets ratio (CRAR) of less than 9 per

ure of 3 executive directors and Rural Development (Nabard), is cent, of which six RRBs had negative
based on the data uploaded by the CRAR. System-wide CRAR of RRBs de-
of Canara Bank, IOB RRBs in the Ensure portal. As on March teriorated to 10.2 per cent as on

The Central government has extended 31, 2020, there were 45 RRBs func- March 31, 2020 from 11.5 per cent in
the tenure of three executive directors tioning in 685 districts of 26 states and the previous year, the data showed.
of Canara Bank and Indian Overseas three union territories (UTs). These
Bank for a period of two years. The RRBs are sponsored by 15 commercial FM encourages use of re-
tenure of executive directors banks and operating through a net- gional language in banking
Debashish Mukherjee and Matam work of 21,850 branches. Public Sector banks should consider
Venkata Rao has been extended for Gross non-performing assets as a per- focusing on regional languages for bet-
two years, or until further orders, centage of gross loans outstanding of ter customer service, especially in ar-
whichever is earlier beyond their cur- RRBs marginally declined to 10.4 per eas where people are not conversant
rently notified terms which expire on cent as on March 31, 2020, from 10.8 with Hindi, finance minister Nirmala
February 18, 2021 and October 8, per cent as on March 31, 2019, the Sitharaman said.
2020, respectively, Canara Bank said in data showed.
regulatory filings. Share of standard, sub-standard, Sitharaman was speaking at the virtual
launch of a uniform training
The extension has been given as per doubtful and loss assets stood at 89.6 programme, including modules on pre-
the notification of the Department of per cent, 3.6 per cent, 6.5 per cent ventive vigilance, for induction and
Financial Services, the Finance Minis- and 0.3 per cent, respectively, as of mid-level training for officers of public
try dated October 10, Canara Bank end March 2020. Eighteen of the 45 sector banks.
said. RRBs (as against 20 out of 53 RRBs as
on March 31, 2019) had GNPA above She said that while banking recruit-
Chennai-headquartered Indian Over-
10 per cent as on March 31, 2020. ments allow candidates from across
seas Bank (IOB) in a separate filing said the country to join, there is a need for
the government has extended the RRBs, at aggregated level, achieved a bankers to know the local language of
term of Ajay Kumar Srivastava as ex- growth of 8.6 per cent in their business the area they are posted in.
ecutive director for a period of two in FY20 compared to a growth of 9.5
years beyond his currently notified per cent in the previous year, accord- "In some pockets where Hindi does not
term which expires on October 8, ing to the data. Total business of RRBs work, we need to have a cadre of
2020, or until further orders, which- stood at Rs 7.77 lakh crore as on people who will have to understand
March 31, 2020.
ever is earlier. the language of the state in which
Deposits and advances of RRBs in- their first posting happens," said
Regional rural banks incur creased by 10.2 per cent and 9.5 per Sitharaman.
cent, respectively during FY2019-20.
net loss of Rs. 2,206 cr in Gross outstanding loans stood at Rs She said that officers of the Indian
Administrative Service (IAS) learn the
FY20 2.98 lakh crore as against Rs 2.80 lakh language of the state cadre to which
Regional rural banks (RRBs) as a group crore in FY19. they get attached, and the Indian For-
reported net loss of Rs 2,206 crore in Priority sector loans constituted 90.6 eign Service (IFS) also allows its cadre

6 | 2020 | OCTOBER | BANKING FINANCE