Finance Minister promises to strengthen regional rural banksBy ANI
Monday, February 28, 2011
NEW DELHI - Union Finance Minister Pranab Mukherjee on Monday said the regional rural banks will be strengthened to enable them to maintain a Capital to Risk Weighted Asset Ratio (CRAR) of at least nine per cent as on March 31.
Presenting the Union Budget 2010-11 in the Parliament today, Mukherjee said the government will provide Rs. 500 crore to these banks during 2011-12, which received Rs. 350 crore during the current year for this purpose.
He also proposed that the government would provide a sum of Rs. 6000 crore during 2011-12 to enable public sector banks to maintain a minimum Tier I CRAR at eight per cent.
The Government has already been providing a sum of Rs. 20,157 crore for infusion in the public sector banks to maintain Tier I CRAR at 8 per cent and increase Government equity in some banks to 58 per cent.
Considering Micro Finance Institutions (MFIs) as an important means of financial inclusion, Mukherjee has proposed to create in the course of the year, “India Micro Finance Equity Fund” of Rs. 100 crore with Small Industrial Development Bank of India (SIDBI).
He emphasized that the creation of a dedicated fund for providing equity to smaller MFIs would help them maintain growth and achieve scale and efficiency in operations.
“The Committee set up by Reserve Bank of India (RBI) to look into issues relating to micro finance sector in India has submitted its report. The Government is now considering putting in place a framework to protect the interests of small borrowers,” said Mukherjee.
The Finance Minister also proposed to set up a “Women’s SHG’s Development Fund” with a corpus of Rs. 500 crore to empower women and promote their Self Help Groups (SHGs). (ANI)