Page 21 - Banking Finance November 2020

CO-OPERATIVE BANK NEWS

excited to take this forward," said Dinesh With the infusion, sources said, CRAR As per RBI guidelines, the RRBs have
Kukreja, CEO, The United Multistate of these weak RRBs rose to 9 per cent to provide 75 per cent of their total
Credit Cooperative Society Ltd. level as per the regulatory norms pre- credit under priority sector lending.

Multistate Credit Cooperative Societies scribed by the Reserve Bank of India RRBs are primarily catering to the
are regulated by the Central Registrar (RBI). credit and banking requirements of
agriculture sector and rural areas with
of Cooperative Societies rather than This round of infusion would take care
the RBI. No specific permission from of capital needs till March 31, 2021, a focus on small and marginal farmers,
the registrar is required for this, said sources added. micro and small enterprises, rural ar-
Kukreja. tisans and weaker sections of the soci-
RRBs as a group reported net loss of ety.
"We will also be tying up with other co- Rs. 2,206 crore in the fiscal year ended
operative credit societies in the com- March 31, 2020, as against Rs. 652- In addition, RRBs also provide lending
ing months. We will modernise and crore net loss in FY19, according to to micro/small enterprises and small
digitise their operations. Their data published by the National Bank for entrepreneurs in rural areas. With the
branches will act as lounges where Agriculture and Rural Development recapitalisation support to augment
people will be given information about (Nabard). CRAR, RRBs will be able to continue
cryptocurrency. Our strategy will also their lending to these categories of
Gross non-performing assets as a per- borrowers under their PSL target, and
rescue a struggling cooperative credit centage of gross loans outstanding of
sector which has been forced to close RRBs marginally declined to 10.4 per thus, continue to support rural liveli-
branches and lay off staff due to Covid hoods.
19," added Gaurav. cent as on March 31, 2020, from 10.8 With a view to enable RRBs to
per cent as on March 31, 2019, the
minimise their overhead expenses,
data showed.
Mega boost to Regional optimise the use of technology, en-
Deposits and advances of RRBs in- hance the capital base and area of
Rural Banks: Govt to in- creased by 10.2 per cent and 9.5 per operation and increase their exposure,
fuse Rs. 670 crore cent, respectively during FY2019-20. the government has initiated struc-
TheCentral government has provided Gross outstanding loans stood at Rs. tural consolidation of RRBs in three
Rs. 670 crore to Regional Rural Banks 2.98 lakh crore as against Rs. 2.80 lakh phase, thereby reducing the number of
(RRBs) considering their importance in crore in FY19. RRBs from 196 in 2005 to 45 at
agriculture finance during these diffi- Priority sector loans constituted 90.6 present.
cult times. per cent or Rs. 2.70 lakh crore of the
Of the 43 RRBs, about one-third espe- gross loans outstanding of RRBs as on Goa Bank Employees Co-
cially from north-eastern and eastern March 31, 2020. Share of agriculture op to be liquidated
regions are in losses and they needed and MSME sectors in total loan out- Registrar of Co-operative Societies,
fund to meet regulatory capital re- standing stood at 70 per cent and 12 Goa has ordered the closure of two co-
quirement of 9 per cent, sources said. per cent, respectively. operative societies for their non-com-
As per the current scheme for As of end March 2020, 17 out of the pliance with statutory requirements
recapitalisation of RRBs, the capital 45 RRBs had CRAR of less than 9 per for a long time.
support is provided to these banks by cent, of which six RRBs had negative These two societies are Employees Co-
the Centre, concerned state govern- CRAR. System-wide CRAR of RRBs de- operative Credit Society and the Goa
ments and the sponsor banks in the teriorated to 10.2 per cent as on Bank Employees Co-op Credit Society.
ratio of 50:15:35, respectively to en- March 31, 2020 from 11.5 per cent in Both societies will soon be liquidated
able them to meet the regulatory re- the previous year, the data showed. as part of the winding up process.
quirement of capital to risk weighted These banks were formed under the Earlier, the registrar had sent a show
assets ratio (CRAR) of 9 per cent. RRB Act, 1976 with an objective to cause notice to both the co-operative
According to sources, matching funds provide credit and other facilities to societies. Sources say under the exist-
were released by sponsor banks and small farmers, agricultural labourers, ing circumstances, revival of the bank
many of the state governments. and artisans in rural areas. was impossible. T

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