According to a recent press report said that the finance ministry, in an attempt to extend the reach of banks in rural and semi-urban areas, has asked public sector banks to integrate their operations with regional rural banks (RRBs).
A finance ministry official said that the charges for various banking services used by customers of RRBs are to be aligned with the sponsoring banks. Also cheques or drafts issued by RRBs should be treated at par with their sponsoring bank.
Reports said that the government expects RRBs to offer more, and quicker, loans to borrowers in India’s hinterland as part of its financial inclusion drive. The loan portfolio of the RRB’s include home loans, personal loans, agricultural loans, business loans, loans to SHGs etc.
The RBI wants RRBs to disburse at least s 51,000 crore worth of loans, or 10.7% of the 475,000 crore lending target it has set for public sector banks for the current fiscal.