Pranab asks state govts of east zone to release Rs 198 cr for RRBs
Kolkata: Finance ministry Pranab Mukherjee on Saturday asked state governments of the eastern region to release about Rs 200 crore as part of their share for recapitalisation of Regional Rural Banks (RRBs).
"The 10 state governments of the eastern region are now required to release Rs 198.50 crore for recapitalisation of 18 RRBs. I would request them to release their share expeditiously," Finance Minister Pranab Mukherjee said while addressing Chief Ministers and bankers of the eastern region.
RRBs are owned jointly by the Government of India, the state governments concerned and the sponsor banks.
The issued capital of RRBs is subscribed by the central government, state government and sponsor banks in the proportion of 50 percent, 15 percent and 35 per cent, respectively.
Highlighting the importance of Regional Rural Banks (RRBs), the Finance Minister said, they are playing an increasingly important role in the growth of rural economy.
"I am happy to note that out of 82 RRBs functioning in the country, 80 RRBs have rolled out the CBS. These institutions will soon be a part of National Electronic Funds Transfer (NEFT). I am also happy to note that all the 22 RRBs functioning in the East Zone states are participating in the NEFT system through their sponsor bank," he said.
With this, all the RRBs in the country will be in a position to provide facility to their customers to remit funds across the country.
As regards financial support, Mukherjee said, the Government of India in 2010-11 has announced a scheme for supporting 40 weakest RRBs. 13 RRBs have been provided the recapitalisation support during 2010-11 and 2011-12 to the tune of Rs 354.64 crore, half of which has been contributed by the Central Government.
Noting the fact that insurance penetration in the region is low, the Finance Minister said, "I notice that a number of districts, especially, in the North Eastern States are not having a single branch of Insurance companies - either Life or non-life."
He said that out of 194 districts covered under review today, 53 districts do not have any branch. Similarly, out of 56 North East districts, 31 do not have any branch.
"I am instructing LIC and Non-life Insurance companies to ensure that all districts have at least one branch or a satellite office during the coming year. We have been popularising insurance coverage of rural poor through various schemes as a part of Financial Inclusion," he said.