New Delhi, Feb 10 (ANI): The Union Cabinet today approved the recapitalization of Regional Rural Banks (RRBs) to improve their capital.
Briefing reporters here, Information and Broadcasting Minister Ambika Soni said, Central Government's share of 1100 crores rupees on this account will be released for this fiscal and the next.
"However, the Centre's share will be contingent on proportionate release of State Governments and sponsor- banks' share," she add3ed
A capacity building fund with a corpus fund of one hundred crore rupees to be set up by the Central Government with NABARD has also been approved.
The functioning of the Fund will be periodically reviewed by the Central Government. An Action Plan will be prepared by NABARD in this regard and sent to Government for approval.
The Regional Rural Banks (RRBs) were established in 1975 with the objective to create an alternative channel to 'cooperative credit structure' with a view to ensure sufficient institutional credit for rural and agriculture sector.
The RRBs are integral segment of the Indian banking system with focus on serving the rural areas. As on date 82 RRBs are functioning in the country.
RRBs are jointly owned by Government of India, the State Government concerned and the Sponsor Banks.
The issued capital of RRBs is subscribed by Central Government, State Government and sponsor banks in the proportion of 50 per cent, 15 per cent and 35 per cent, respectively. (ANI)