DFS Approves Viability Plan 2.0 for Regional Rural Banks

Current Context: The Department of Financial Services (DFS) approved Viability Plan 2.0 on May 5, 2026, as a three-year framework (FY 2025-26 to 2027-28).

• It covers all 28 RRBs after the “One State One RRB” consolidation, ensuring uniform oversight and governance reforms.
• The plan is structured around four pillars—Operational Excellence, Asset Quality, Profitability, and Growth—with 30 performance parameters.
• Key metrics include CRAR, CD ratio, NPAs, recovery, profitability ratios, digital adoption, and government scheme implementation.
• Its objectives are to strengthen stability, improve efficiency, enhance competitiveness, and align RRBs with Digital India and financial sector reforms.
• Unlike Plan 1.0 (FY 2022-23), which focused mainly on credit expansion and NPA reduction, Plan 2.0 adds stricter monitoring, advanced technology adoption, and consolidation for long-term viability.

Question:

Q.1 Viability Plan 2.0, approved by the Department of Financial Services (DFS) in May 2026, is designed for which type of financial institutions?
a) Cooperative Banks
b) Regional Rural Banks
c) Small Finance Banks
d) Payments Banks

Answer: b) Viability Plan 2.0 has been introduced specifically for Regional Rural Banks (RRBs) to improve their governance, efficiency, profitability, and long-term sustainability after the “One State One RRB” consolidation.