Recapitalisation of Regional Rural Banks

On 25th March, 2020, the Centre approved a ,340-crore recapitalisation plan for regional rural banks (RRBs) to improve their capital-to-risk weighted assets ratio (CRAR).
The reason for the infusion was to ensure financially stronger and robust RRBs with improved CAR to enable them to meet the credit requirement in the rural areas.
At thetime of lockdown due to the COVID-19 crisis, financially stronger rural banks could also be crucial to ensuring liquidity in rural areas.

Key Points

  • The central government will provide Rs 670 crore and an equal amount will come from the banks for recapitalisation
  • Minimum regulatory capital to RRBswill be provided ....


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