Rural Banks shift focus to product diversification

After consolidating capital adequacy, improving profitability and asset quality, regional rural banks (RRBs) will now focus on diversification of lending products to small and medium enterprises (SMEs) for value addition in agriculture chain and allied sectors.

The top priority will be upgrading the technology platform for digital banking for retaining existing customers and attracting new ones in rural areas.

Goverdhan S. Rawat, deputy managing director, Nabard told, that with fund infusion and profitability, the capital adequacy has improved substantially and asset quality is robust.

Now, they will intensify efforts on sustaining efficiency and productivity for which boards of banks will prepare a five-year road map for standing on their own feet.

The consolidated capital adequacy of RRBs was 10.16 per cent as on March 31, 2021, before beginning of the recapitalisation process in FY22. It steadily increased to 12.7 per cent in FY22, 13.4 per cent in FY23 and finally to 14.2 per cent in FY24, Nabard data showed.