Regional rural banks must empower MSMEs via flagship govt schemes: FM Sitharaman

Bengaluru: Finance Minister Nirmala Sitharaman on Saturday urged Regional Rural Banks (RRBs) to increase credit disbursement for MSMEs under various flagship government schemes such as MUDRA, PM Vishwakarma, etc, with the active support of their sponsor banks.

In a meeting to review the performance of 10 RRBs of the southern region here, FM Sitharaman directed RRBs to increase their share in ground-level agriculture credit disbursement with special focus on allied agriculture activities like dairy, animal husbandry, fisheries etc, and to take necessary steps to realise the full potential of allied agriculture activities in the region.

RRBs and sponsor banks were specially directed by the Finance Minister to work with respective state government departments to increase credit disbursement to fisheries sector in Kerala and the dairying sector in Telangana.

Union Minister of State for Finance, Pankaj Chaudhary, also urged banks to give maximum thrust to achievement under financial inclusion schemes.

The meeting focused on business performance, upgrading digital technology services, and fostering business growth in activities allied to agriculture and micro and small industry.

The Finance Minister acknowledged RRBs for the demonstrable improvement in their financial performance and technology upgradation ever since regular review was initiated in 2022.

During the review, the importance of enhancing the Current Account Savings Account (CASA) deposits was underlined, reinforcing the need for RRBs in the southern region to mobilise CASA deposits to further accelerate the pace of sustainable credit growth.

FM Sitharaman also noted the significant role played by RRBs in financial inclusion in southern region, and urged them to continue their efforts towards saturation under financial inclusion schemes of Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Atal Pension Yojana (APY), etc. by achieving respective targets.

Specific emphasis was placed on reinforcing credit support to MSMEs and streamlining customer onboarding processes through digital innovations.

SIDBI and RRBs were directed by the Union Minister to collaborate on digital platforms, exploring co-lending/risk sharing models and refinance for MSME portfolio.

FM Sitharaman also stated that all RRBs should devise a strategy for MSME credit with customised products aligning with cluster activities and conduct special outreach programmes with convergence and awareness regarding the various schemes.