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RRBs Receive Rs 6212.03 Crore from Government under Recapitalization Scheme

Published on March 26, 2024
Current Context: As of March 6, the Indian government had allocated Rs 6212.03 crore to Regional Rural Banks (RRBs) as part of the recapitalization initiative.
RRBs Receive Rs 6212.03 Crore from Government under Recapitalization Scheme
  • This scheme aims to support RRBs in maintaining the minimum prescribed capital-to-risk (Weighted) assets ratio of 9 percent.
  • The performance of RRBs has improved significantly, with a consolidated CRAR (Capital to Risk-weighted Assets Ratio) at an all-time high of 13.83 per cent as of December 31, 2023.
  • Indian RRBs have shown the highest ever consolidated net profit of Rs 4,974 crores in FY22-23 and a net profit of Rs 5,236 crore up to the 3rd quarter of FY 2023-24.
  • This comes against a backdrop of a 3-year board-approved viability plan (VP) in the financial year 2022-23, with a well-defined implementation mechanism aimed at achieving sustainable viability.
  • RRBs are vital for banking and financial services to rural communities, agriculture activities and small businesses.
  • There are 43 RRBs sponsored by 12 scheduled commercial banks in India.

Question:

Q.1 What is the minimum prescribed capital-to-risk (Weighted) assets ratio that Regional Rural Banks (RRBs) are expected to maintain?
a. 7 percent
b. 8 percent
c. 9 percent
d. 10 percent
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