Current context: The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has given its approval for continuation of the process of recapitalization of Regional Rural Banks (RRBs).
a. 6%
b. 7%
c. 8%
d. 9%
- The recapitalization will provide minimum regulatory capital to RRBs for another year beyond 2019-20, that is, up to 2020-21.
- It will be for those RRBs which are unable to maintain minimum Capital to Risk weighted Assets Ratio (CRAR) of 9%, as per the regulatory norms prescribed by the Reserve Bank of India.
- The CCEA has also approved utilization of 50% of the total recapitalization support of Rs.1340 crore i.e. Rs.670 crore as central government share for the scheme of Recapitalization of RRBs.
- Based on the Capital to Risk Weighted Assets Ratio (CRAR) position of RRBs, as on 31st March of every year, National Bank for Agriculture and Rural Development (NABARD) identifies those RRBs, which require recapitalisation assistance to maintain the mandatory CRAR of 9%.
- As per RBI guidelines, the RRBs have to provide 75% of their total credit under PSL (Priority Sector Lending).
Question:
Q.1 As per the Reserve Bank of India, What is the mandatory minimum Capital to Risk-Weighted Assets Ratio (CRAR) of Regional Rural Banks (RRBs)?a. 6%
b. 7%
c. 8%
d. 9%
