Unprofitable, growing bad assets: The tale of existential crisis at RRBs

They are mostly loss-making, with growing bad assets so the agricultural sector prefers commercial banks

Last month, the finance ministry issued draft guidelines setting the criteria for the listing of regional rural banks (RRBs) on the stock exchange. The guidelines included listing banks that have earned an operating profit of more than Rs 15 crore in three out of the past five financial years, a net worth of Rs 300 crore and a capital adequacy ratio above the required 9 per cent in the past three years.

Yet RRBs have largely been unprofitable for the government. The government has amalgamated various standalone RRBs at different points in time to cut overhead costs among other reasons. A