29 RRBs to be recapitalised with states' consent

29 RRBs to be recapitalised with states' consent

BS Reporter / New Delhi July 16, 2007

The central government may issue tradable recapitalisation bonds to infuse fresh capital in regional rural banks (RRB), who have eroded their networth.Out of the 96 RRBs, 29 have a negative networth, and need recapitalisation of Rs 1,850 crore to make their networth positive by 2010.

"We will be writing to the state governments on recapitalisation of RRBs, if they agree, it will be done as soon as possible," Finance Minister P Chidambaram today said, after reviewing the performance of RRBs in a first ever meeting with their chairmen.

The central government, states and commercial banks own 50%, 15% and 35% stake in RRBs respectively.

If the state governments don