Sign In
Learn bits
Economy
Mahesh

03/10/22 21:05 PM IST

Draft guidelines for listing of RRBs on stock exchanges ISSUED

In News 
  • 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.
Draft guidelines 
  • 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.
  • They should also have capital adequacy above the regulatory minimum level of 9 per cent in each of the preceding three years. 
  • 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.
  • 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.
  • RRBs, which play an important role in agriculture credit, are sponsored by Public Sector Banks (PSBs). 
RRBs 
  • 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. 
Source- Indian Express 

More Related Current Affairs View All

05 Mar

First-ever comprehensive survey of India’s river dolphins

'Prime Minister Narendra Modi released the results of the first-ever comprehensive population estimation of riverine dolphins – Gangetic and Indus dolphins – done in In

Read More

05 Mar

Arresting women at night

'The Madurai Bench of the Madras High Court in Deepa versus S. Vijayalakshmi and Others ruled that the legal provision in the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, which

Read More

05 Mar

Digital Personal Data Protection Act, 2023

'The Ministry of Electronics and Information Technology (MeitY) looking to wrap up public consultations on the draft Rules for the Digital Personal Data Protection Act, 2023 by Mar

Read More

India’s First Ai-Driven Magazine Generator

Generate Your Custom Current Affairs Magazine using our AI in just 3 steps