**Executive Summary**
This document is a response to an unstarred question in Lok Sabha regarding Regional Rural Banks (RRBs). It outlines the Government's review of RRBs, their role in supporting Farmer Producer Organizations (FPOs), increasing banking outreach, and improving performance under national financial-inclusion schemes. Key initiatives include reviews of RRBs performance, a Gram Panchayat level Saturation Campaign running from July 1, 2025, to October 31, 2025, and efforts to ensure banking outlets within 5 km of all villages by October 31, 2025.
**Key Points / Main Content**
* **RRB Performance Review:**
* The Government of India regularly reviews the performance of RRBs at national and regional levels.
* Multiple review meetings of RRBs have been held under the Chairpersonship of the Finance Minister.
* **Support for Farmer Producer Organizations (FPOs):**
* NABARD prepared a "Guidance Note for financing Farmer Producer Organisations (FPOs) by Banks."
* RBI advised IBA to circulate the guidance note to facilitate credit evaluation framework adoption.
* RBI requested IBA to instruct sponsor banks to share the guidance note with RRBs.
* **Banking Outreach:**
* The government aims to ensure a banking outlet within 5 km of all inhabited villages.
* Availability is monitored via the Jan Dhan Darshak (JDD) App.
* As of October 31, 2025, 99.91% villages have banking outlets within 5 km.
* **Gram Panchayat (GP) Level Saturation Campaign:**
* A campaign was launched from July 1, 2025, to October 31, 2025.
* Objective: comprehensive financial inclusion.
* Participation: Public Sector Banks (PSBs), RRBs, Private Banks, Small Finance Banks (SFBs), and Cooperative Banks.
* **Improving RRB Performance under Financial Inclusion Schemes:**
* Onboarding of RRBs on JanSuraksha scheme portal.
* Financial support by NABARD for Financial and Digital Literacy Programmes.
* NABARD support for NGOs, RRBs, MFIs, and PACS since 1992.
* NABARD's eKisanCredit (eKCC) portal for streamlining agricultural loan processes.
* Incentive Scheme of NABARD for Customer Service Points (CSPs) / BCs operating in Northeast and Hilly States / UTs.
* Financial support by NABARD for deployment of banking touchpoints.
* **Department of Financial Services (DFS) Initiatives:**
* DFS conducts periodic meetings with RRBs and sponsor banks.
* Agenda includes financial parameters, technology upgrades, MSME portfolio thrust, and loan diversification.
**Impact Analysis**
**RRBs:**
* **Impact:** Subject to regular performance reviews; required to focus on financial inclusion, technology upgrades, MSME lending, and loan diversification.
* **Action Required:** Implement strategies to improve performance on financial parameters, upgrade technology, expand the MSME portfolio, and diversify loan offerings.
**NABARD:**
* **Impact:** Responsible for providing guidance and financial support to RRBs for various initiatives, including FPO financing, digital literacy, and deployment of banking touchpoints.
* **Action Required:** Continue to support RRBs through guidance notes, financial programs, and technology initiatives to enhance their operational efficiency and financial inclusion efforts.
**RBI:**
* **Impact:** Plays a crucial role in disseminating guidelines and ensuring the adoption of best practices in the banking sector, particularly concerning FPO financing.
* **Action Required:** Ensure that the guidance note prepared by NABARD reaches all member banks and that sponsor banks share the guidance with RRBs.
**Sponsor Banks:**
* **Impact:** Expected to support RRBs by sharing the guidance note on FPO financing and collaborating in various financial inclusion initiatives.
* **Action Required:** Share NABARD's guidance note on FPO financing with RRBs and actively participate in financial inclusion programs.
**Villages/Rural Population:**
* **Impact:** Beneficiaries of increased banking outreach and financial inclusion efforts.
* **Action Required:** Utilize the available banking outlets and participate in financial literacy programs.
**IBA:**
* **Impact:** Responsible for circulating the guidance note to facilitate credit evaluation framework adoption.
* **Action Required:** Ensure that the guidance note prepared by NABARD reaches all member banks.
Key Entities Referenced
Regional Rural Banks (RRBs): Primary subject of the question, concerning their role in the rural economy and financial inclusion.
NABARD: National Bank for Agriculture and Rural Development, plays a significant role in supporting and regulating RRBs, and providing schemes.
Department of Financial Services (DFS): A department under the Ministry of Finance responsible for reviewing RRBs and launching financial inclusion campaigns.
Farmer Producer Organisations (FPOs): RRBs are issuing guidelines to support FPOs.
Government of India
Ministry of Finance
Department of Financial Services
LOK SABHA
UNSTARRED QUESTION NO. 2461
ANSWERED ON MONDAY, DECEMBER 15, 2025/AGRAHAYANA 24, 1947 (SAKA)
Regional Rural Banks (RRBs)
2461. SHRI JAGDAMBIKA PAL:
Will the Minister of FINANCE be pleased to state:
(a) whether the Government has reviewed the capacity of Regional Rural Banks (RRBs) to meet
the evolving credit needs of the rural economy, including emerging sectors such as agro-
processing, allied-agriculture and rural MSMEs and if so, the details thereof;
(b) the details of the guidelines issued to RRBs for supporting Farmer Producer Organisations
(FPOs) through customised financial products and improved service delivery;
(c) whether the Government proposes to increase banking outreach in financially underserved
rural regions through RRB branch expansion or digital infrastructure, if so, the details thereof;
and
(d) the steps taken to improve the performance of RRBs under national financial-inclusion
schemes and to promote better collaboration with NABARD and State Governments?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a): Government of India is regularly reviewing the performance of Regional Rural Banks
(RRBs) to meet the evolving credit needs of the rural economy, including emerging sectors like
agro-processing, allied-agriculture, and rural Micro Small and Medium Enterprises (MSMEs) at
national and regional levels. The following reviews of RRBs have been held under the
Chairpersonship of Finance Minister in last four financial years:
S.No National/Regional level Date and Place
1. National level 07.07.2022 at New Delhi
2. North-Eastern RRBs 21.07.2023 at Agartala
3. Southern RRBs 04.08.2023 at Chennai4. Northern RRBs 30.08.2023 at New Delhi
5. National level 19.08.2024 at New Delhi
6. Western-Central RRBs 22.08.2024 at Udaipur
7. North-Eastern RRBs 30.09.2024 at Itanagar
8. Southern RRBs 09.11.2024 at Bengaluru
9. Eastern RRBs 29.11.2024 at Patna
10. Karnataka Grameena Bank 16.10.2025 at Ballari
Further, as a follow-up, Department of Financial Services (DFS) has conducted periodic and
regular meetings with RRBs and sponsor banks at various levels.
The agenda items for the review meetings, inter-alia, include:
(i) Review of the performance of RRBs on Financial Parameters and technology upgradation.
(ii) Thrust on MSME portfolio.
(iii) Importance on loan diversification towards Agri-allied, MSME and Retail Sectors.
(b) National Bank for Agriculture and Rural Development (NABARD) had prepared a "Guidance
Note for financing Farmer Producer Organisations (FPOs) by Banks” and submitted to the
Reserve Bank of India (RBI) for wider dissemination across the banking sector. Pursuant to this,
RBI in 2020, has advised the Indian Banks’ Association (IBA) to circulate the guidance note
among its member banks to facilitate speedy and effective adoption of the credit evaluation
framework outlined therein, in alignment with their respective Board-approved policies.
Additionally, IBA has been requested by RBI to instruct sponsor banks to share the guidance
note with RRBs.
(c) The endeavour of the Government is to ensure availability of banking outlet (Bank branch /
Business Correspondent (BC) / India Post Payments Bank (IPPB)) within 5 kilometres of all
inhabited villages in the country. Availability of banking outlets is monitored by a Geographic
Information System (GIS) based App., namely, Jan Dhan Darshak (JDD) App. Based on the data
uploaded by Banks on the JDD App, as on 31.10.2025, 99.91% villages in the country are
covered with banking outlets (Bank Branch / BC / IPPB) within a radius of 5 Km.
(d) DFS launched a Gram Panchayat (GP) level Saturation Campaign from 01.07.2025 to
31.10.2025 with the objective of achieving comprehensive financial inclusion, with participation
from Public Sector Banks (PSBs), RRBs, Private Banks, Small Finance Banks (SFBs) and
Cooperative Banks.Further, following steps have been taken to improve the performance of RRBs under national
financial-inclusion schemes:
(i) Onboarding of RRBs on JanSuraksha scheme portal has enabled them to enrol and settle
claims with respect to Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri
Suraksha Bima Yojana (PMSBY) for the benefit of their customers.
(ii) Financial support by NABARD to RRBs for conducting Financial and Digital Literacy
Programmes. These programmes entail generating awareness on banking products, social
security schemes of Government of India, digital banking and cyber security for the banking
customers.
(iii) Since 1992, NABARD has supported Non-Governmental Organizations (NGOs), RRBs,
Micro Finance Institutions (MFIs), Primary Agricultural Credit Societies (PACS) etc to promote,
nurture and credit-linkage of Self-Help Groups (SHGs). NABARD has also helped in faster
settlement of SHG interest subvention claims under Deendayal Antyodaya Yojana-National
Rural Livelihood Mission (DAY-NRLM) through their Interest subvention portal. Further, it also
provides grant support for Joint Liability Group (JLG) formation and capacity building.
(iv) NABARD has developed eKisanCredit (eKCC) portal for RRBs to streamline agricultural
loan process which will help in reducing the turnaround time for credit disbursement.
(v) Incentive Scheme of NABARD for Customer Service Points (CSPs) / BCs of RRBs operating
in Northeast and Hilly States / Union Territories (UTs). The BCs are paid monthly remuneration
to offset the expenses incurred by them towards operating in difficult terrain.
(vi) Financial support by NABARD to RRBs for deployment of banking touchpoints such as
Micro Automated Teller Machines (Micro-ATM), Point of Sale (POS) / Mobile Point of Sale
(MPOS) devices, and Demonstration Vans.
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