Recapitalisation plan for regional rural banks approved
Part of: GS Prelims and GS-III – Economy
- The Centre has approved Rs.1.304 crore recapitalisation plan for regional rural banks.
- It is done to improve their capital-to-risk weighted assests ratio (CRAR).
- These institutions that play major role in provision of credit in rural areas shall be strengthened.
Important value additions:
Regional Rural Banks.
- Regional Rural Banks (RRBs) are Indian Scheduled Commercial Banks (Government Banks)
- They operate at regional level in different states of India.
- They have been created with a view to serve primarily the rural areas of India with basic banking and financial services.
Capital-to-Risk weighted Assets Ratio (CRAR)
- The CRAR is the capital needed for a bank measured in terms of the assets (mostly loans) disbursed by the banks.
- Higher the assets, higher should be the capital by the bank.