Cabinet to infuse Rs 632 crore in regional rural banks

The Cabinet will consider infusing Rs 632 crore in regional rural banks (RRB) in its meeting on Thursday in order to increase its lending to the farm sector.

The Cabinet had in February this year approved capital infusion Rs 1,100 crore. Mooting the cause of RRBs, Finance Minister Pranab Mukherjee while presenting the Union Budget of 2012, said that the Government had initiated the process of capitalisation of 40 financially weak RRBs. Of the 40, 12 of them were capitalised in February this year.

RRBs, are jointly owned by Government of India, the State Government concerned and the Sponsor banks.

The government also proposed to extend the scheme of capitalisation of weak RRBs by another 2 years to enable all the states to contribute their share. The Finance Minister added that of the 82 RRBs in India, 81 have successfully migrated to Core Banking Solutions (CBS) and have also joined the National Electronic Fund Transfer system.