RRB staff want to handle debt waiver scheme

The All India Regional Rural Banks Association (RRBEA) has urged the Union finance ministry to give priority to regional rural banks (RRBs) in executing the debt waiver scheme, without any obligation for statutory audit to get reimbursement.

The banks have also demanded that they should also be allowed to show a reduction in the non performing assets (NPA) on account of the debt waiver scheme.

Earlier, the Reserve Bank of India had advised the RRBs not to show the amount of loan waived for the purpose of reducing the NPA and increasing the income in the books of account, till the amount is received from RBI or Nabard.

 

According to RRBEA, this will cause huge damage to the financial status of the RRBs, since they have already waived huge amount of money and started giving advances to the eligible borrowers.

The RRBEA has already written a letter to the Union ministry of finance in this regard.

In another letter written to the Union finance ministry, the RRBs have said that they incurred loss of about Rs 500 crore due to non-payment of interest on cash reserve ration (CRR) exceeding 3 per cent, by RBI.

Under the present legislation, the RBI is not allowed to pay interest on CRR.

However, the RRBs have asked the RBI to pay them the interest on CRR through Nabard, which in turn would extend the refinance only to RRBs having high credit deposit (CD )ratio, with the restriction to finance for farm-related loans.

Also, the RRBEA has said that even RRBs with as high CD ratio as 100 per cent are not getting funds from Nabard due to several restrictions.

The association also pointed out that the empowered committee on branch expansion in some states were hesitant to grant licenses to RRBs for opening branches. It has also called for a common software in the proposed CBS scheme.

Also RRBs have asked for more autonomy in human resource management.