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Source: The post is based on the article “Centre asks IBA to ready EASE-like plan for regional rural banks” published in Business Standard on 10th August 2022.
What is the News?
The Centre has asked the Indian Banks Association(IBA) to prepare a viability plan for Regional Rural Banks(RRBs) similar to the Enhanced Access and Service Excellence (EASE) for public sector banks(PSBs).
What is EASE?
Enhanced Access and Service Excellence(EASE) is a common reform agenda for Public Sector Banks (PSBs).
It is aimed at institutionalizing clean lending, better customer service, simplified and enhanced credit and robust governance and HR practices.
What are the reforms the government is planning for RRBs?
EASE-like Plan for RRBs: Government has asked the Indian Banks Association(IBA) to prepare a viability plan for Regional Rural Banks(RRBs) similar to the EASE plan for public sector banks(PSBs).
Restructure RRBs: The Department of Financial Services(DFS) had formed an expert committee to seek recommendations for making RRBs viable in the medium to long term.
– The panel has recommended operational and governance reforms for RRBs that will be based on the achievement of operational milestones.
– These include credit expansion, business diversification, NPA reduction, cost rationalization, technology adoption and improvement in corporate governance among others.
List RRBs on Stock exchange: The government is looking to list operationally-sound RRBs on the stock exchanges. This move is seen as providing additional sources to meet their regulatory capital requirement.