RRBs Receive Rs 6212.03 Crore from Government under Recapitalization Scheme

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.

• 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