Govt rolls out RRB viability plan 2.0 to strengthen rural banking system

New Delhi, May 5 (IANS) The Department of Financial Services (DFS) on Tuesday approved a revised Viability Plan 2.0 for Regional Rural Banks (RRBs) for the period 2025-26 to 2027-28, aiming to strengthen financial sustainability, governance, and long-term competitiveness. 

The move builds on the earlier three-year viability framework implemented between FY22 and FY25, which played a key role in improving financial performance and institutionalising monitoring mechanisms across RRBs.

“The framework has been instrumental in improving financial performance and strengthening monitoring mechanisms across RRBs,” the Ministry of Finance said.

With evolving challenges in the financial sector, the government has decided to extend and refine the framework to ensure continued oversight and efficiency.

The new Viability Plan 2.0 introduces a structured framework based on 30 performance parameters, organised around four key pillars -- operational excellence, asset quality, profitability, and growth.

These parameters are designed to provide a comprehensive assessment of the overall health and functioning of RRBs.

“In view of emerging financial sector challenges and the need for continued oversight, DFS has now approved a revised Viability Plan 2.0 for a further period of three years from 2025-26 to 2027-28, aimed at enhancing financial sustainability and long-term competitiveness of RRBs,” the ministry added.

Key metrics under the framework include capital adequacy ratio (CRAR), credit-deposit ratio, digital adoption levels, non-performing assets (NPAs), recovery performance, and profitability indicators.

The plan also factors in the performance of banks in implementing various Government of India schemes, aligning operational goals with national priorities.

The government said the revised framework aims to create a balanced and transparent system for monitoring performance while encouraging efficiency improvements across the network of 28 RRBs.

The initiative is expected to strengthen financial stability in the rural banking sector and enhance the ability of RRBs to support rural credit expansion, promote digital inclusion, and deepen financial outreach in underserved areas.

--IANS

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