To strengthen the rural banking in the wake of the corona pandemic, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, on Wednesday, approved the continuation of the process of recapitalisation of Regional Rural Banks (RRBs) by providing minimum regulatory capital to them for the next financial year 2020-21.
The RRBs were facing problem to maintain minimum capital to Risk weighted Assets Ratio (CRAR) of 9%, as per the regulatory norms prescribed by the Reserve Bank of India and this decision will help to overcome the minimum capital keeping crisis.
As per this decision, the Centre will pay Rs.670 crore (50%), subject to the condition that the release of Central Government’s share will be contingent upon the release of the proportionate share by the sponsor banks, said Union Minister Prakash Javadekar detailing the package. This scheme will make the RRBs financially stronger and will enable them to meet the credit requirement in the rural areas, he added.
“As per RBI guidelines, the RRBs have to provide 75% of their total credit under PSL (Priority Sector Lending). RRBs are primarily catering to the credit and banking requirements of agriculture sector and rural areas with focus on small and marginal farmers, micro & small enterprises, rural artisans and weaker sections of the society. In addition, RRBs also provide lending to micro/small enterprises and small entrepreneurs in rural areas. With the recapitalization support to augment CRAR, RRBs would be able to continue their lending to these categories of borrowers under their PSL target, and thus, continue to support rural livelihoods,” said the statement issued by Government.
The Cabinet also approved the taking up of construction of Aligarh-Harduaganj flyover by Ministry of Railways. The total length of the railway flyover will be 22 kilometer. The project is expected to be completed by 2024-25 at a cost of over Rs 1,285 crore. “At Aligarh Junction Station a branch line Bareilly-Aligarh terminates. The trains coming from Howrah side and going to Harduaganj/Bareilly cross Howrah-New Delhi main route, which is busiest section of Indian Railways. Due to heavy traffic there is no path available for surface crossing of loaded goods trains coming from Howrah side and going to Harduaganj/Bareilly. This results into heavy detention of trains at Aligarh Junction.
“This location has become a bottleneck and is affecting the train working badly causing delays and detentions and also reducing the wagon turn round. Flyover at Aligarh going over the existing Delhi-Howrah main line is an operational necessity and is essentially required to remove the bottleneck to traffic movement. By construction of flyover connecting Aligarh to Harduaganj the delays and detentions will be avoided,” said Government.
The Union Cabinet also approved continuation of Rebate of State and Central Taxes and Levies (RoSCTL) from 1st April, 2020 onward until such time that the scheme is merged with Remission of Duties and Taxes on Exported Products (RoDTEP). “RoSCTL scheme for apparel and made-ups will be continued with effect from 1st April, 2020 without any change in scheme guidelines and rates as notified by Ministry of Textiles till such time that the RoSCTL is merged with RoDTEP. Continuation of RoSCTL beyond 31st March, 2020 is expected to make the textile sector competitive by rebating all taxes/levies which are currently not being rebated under any other mechanism,” said Government.