FM asks RRBs to develop suitable products aligning with MSME clusters

Finance Minister urges RRBs to align products with MSME clusters for increased financial inclusion and banking penetration nationwide.

Finance Minister Nirmala Sitharaman urged Regional Rural Banks (RRBs) and sponsor banks to develop suitable products aligning with MSME clusters to further increase banking penetration and financial inclusion across the country.

She was speaking at a review meeting, held in connection with National MEME cluster Outreach Programmes here on Saturday, with chairpersons of RRBs and CEOs of their sponsored banks.

The Finance Minister emphasised active outreach by the RRB branches located in MSME clusters to ensure credit to small and micro enterprises in areas like textile, wooden furniture, leather, food processing, packing materials and engineering and machine tools. “These areas hold immense potential for increasing the loan portfolio of RRBs to MSMEs,’‘ she observed.

According to Ms. Sitharaman, all RRBs should have their own updated technology stack to stay relevant especially when digital and mobile banking service are already boosting financial access to regions such as northeastern states and hilly regions, with limited physical connectivity.

However, she also cautioned sponsor banks and RRBs to recognise the challenges ahead and urged to continue focusing on maintaining asset quality, expanding digital services, and ensuring robust corporate governance.

She further urged RRBs to put greater thrust on the clear identification of beneficiaries while sanctioning loans under various schemes like PM Vishwakarma and PM Surya Ghar Muft Bijli Yojana etc. RRBs were also asked to increase credit disbursement in ground-level agriculture.

‘’There should be focus on scaling up agriculture credit disbursement with special focus on allied agriculture activities like dairy, animal husbandry, fisheries,’‘ she stressed.