Govt issues draft guidelines for listing of RRBs; minimum net worth of Rs 300 cr required


PTI, Oct 2, 2022, 2:02 PM IST

In a bid to enable regional rural banks (RRBs) to raise resources by listing on stock exchanges, the government has issued draft guidelines that set certain basic criteria, including net worth of at least Rs 300 crore during the previous three years.

They should also have capital adequacy above the regulatory minimum level of 9 per cent in each of the preceding three years.

The RRBs should have a track record of profitability and earned operating profit of minimum Rs 15 crore for at least three out of the previous five years, according to the draft guidelines issued by the finance ministry recently.

Besides, there should not be any accumulated loss and the lender should have given return on equity of minimum 10 per cent in three out of the preceding five years, it said.

As per the draft norms, the responsibility of identifying suitable lenders for issuing initial public offering (IPO) has been left with the respective sponsor banks.

The sponsor bank would take into account the relevant norms and regulations of the Securities and Exchange Board of India (Sebi) and Reserve Bank of India (RBI) regarding capital raising and disclosure requirements while identifying RRBs for IPO, it said.

RRBs, which play an important role in agriculture credit, are sponsored by Public Sector Banks (PSBs). Currently, the Centre holds 50 per cent in RRBs, while 35 per cent and 15 per cent are with the concerned sponsor banks and state governments, respectively.

These banks were formed under the RRB Act, 1976 with an objective to provide credit and other facilities to small farmers, agricultural labourers and artisans in rural areas. The Act was amended in 2015, whereby such banks were permitted to raise capital from sources other than the Centre, states and sponsor banks.

The RBI has given RRBs the option to issue perpetual debt instruments as another way to obtain regulatory capital and has made these instruments eligible for inclusion as extra tier-1 capital, subject to certain restrictions. There are currently 43 RRBs supported by 12 public sector banks with 21,856 branches across 26 states and 3 Union Territories — Puducherry, Jammu & Kashmir and Ladakh.

These banks have 28.3 crore depositors and 2.6 crore borrowers. A total of 30 out of 43 RRBs together earned a net profit of Rs 1,682 crore in FY’21.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Defeat of scholars in debate led to withdrawal of ‘jizya’ tax in Shah Jahan era: RSS chief

Legislature, executive must enable practice of liberty, equality, fraternity: CJI

Sullia: Woman’s body found stuffed in gunny bag; Husband arrested

Veteran actor Vikram Gokhale dies in Pune hospital

Puttur: Burnt body of woman found in Kumbra

Mangaluru: Parked car catches fire near Juice Junction

Will walk on road to unity till every word of Constitution is upheld: Rahul Gandhi


Related Articles More

Gujarat Assembly polls: Kejriwal says miracle imminent; God will sweep broom to bring AAP to power

Defeat of scholars in debate led to withdrawal of ‘jizya’ tax in Shah Jahan era: RSS chief

Legislature, executive must enable practice of liberty, equality, fraternity: CJI

Elgar accused Anand Teltumbde released from prison, says he was arrested in `fakest’ case

Congress never condemned terror attacks due to vote bank politics: Amit Shah

MUST WATCH

Deepotsava at Shri Durga Adishakti temple

Girija Surgicals nebulizer vedio

KL Rahul Visit Kukke Subrahmanya Temple

Police commissioner N.Shahsikumar statement about viral video

CCTV Footage about mangaluru incident


Latest Additions

Gujarat Assembly polls: Kejriwal says miracle imminent; God will sweep broom to bring AAP to power

Defeat of scholars in debate led to withdrawal of ‘jizya’ tax in Shah Jahan era: RSS chief

Vijay Hazare Trophy: Karnataka thrash Jharkhand, set up quarterfinal against Punjab

Legislature, executive must enable practice of liberty, equality, fraternity: CJI

M’luru: Woman alleges forced conversion, files police complaint

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.