The regional rural banks (RRBs) in India are likely to receive a larger portion of funds as per the directive by finance ministry that they should also be given and treated in the same stature as commercial banks. This action will aid in making RRBs take up a bigger role in financial inclusion.
"The (RBI) has advised its regional offices to discuss this issue with appropriate state authorities to put an end to this discrimination against RRBs," said a senior finance ministry official.
"The government has asked the central bank to ensure that there is equitable placement of deposits, at least under the central government schemes, with RRBs," said the official.
RRBs had been facing discrimination in receiving funds from the government despite the fact that they are jointly held by the central government, state government and sponsoring banks; the percentage of holding being in the ratio of 50%, 15% and 35% respectively.
"RRBs are expected to play a major role in financial inclusion, giving them a part in the government scheme will ensure that the benefits are passed to the last person," the official said.
There are 82 regional rural banks with a network of 15,475 branches.