Daijiworld Media Network - New Delhi
New Delhi, Oct 17: Union Finance Minister Nirmala Sitharaman has called on rural banks to significantly scale up credit disbursement to meet the growing financial needs of the agriculture and allied sectors, highlighting the pivotal role these institutions play in driving rural economic growth. The remarks came during a review meeting of Karnataka Grameena Bank (KaGB) held in Ballari on Thursday, where the Minister assessed key performance indicators including credit growth, non-performing assets (NPAs), financial inclusion progress, and implementation of government schemes.
The Finance Minister directed KaGB and its sponsor bank, Canara Bank, to collaborate closely with state government departments to increase lending to MSMEs and allied agriculture sectors, and to support the potential of Farmer-Producer Organisations (FPOs) by aligning banking products with their evolving needs. While some capital support for FPOs comes from government bodies and development finance institutions, Sitharaman emphasized that banks must fulfill their working capital needs, enabling sustainable growth through a mutually beneficial relationship.
Referring to the post-GST growth in consumption across rural areas, Sitharaman said this upsurge presents a new opportunity for rural banks to expand credit access in semi-urban and rural regions. She encouraged banks to adapt and innovate in response to emerging trends, particularly as several companies are relocating operations such as data centre services to tier-2 and tier-3 cities — a shift that banks can leverage to strengthen their own financial footing.
To improve service delivery and profitability, Sitharaman urged KaGB to enhance operational efficiency, upgrade technology, strengthen customer service, and take concrete steps to reduce stressed assets. She also called for greater engagement with local panchayat committees to better screen applications under government flagship programmes like PM-Vishwakarma and PMFME, ensuring benefits reach the intended beneficiaries effectively.
The Minister advised KaGB to expand its footprint in the Kalyan Karnataka region by opening new branches in underserved areas, improving banking access and inclusivity.
M. Nagaraju, Secretary of the Department of Financial Services (DFS), noted that post-amalgamation systems integration at KaGB has been completed and emphasized the importance of reviewing its medium-term business plan for long-term viability. He encouraged the bank to tap into the region’s potential in agro-processing and MSMEs, and to partner with NABARD to support value-added initiatives in the agricultural sector.
Nagaraju also applauded KaGB’s performance under the Atal Pension Yojana, while recommending stronger efforts under other financial inclusion initiatives like PMJJBY, PMSBY, and PMJDY. He suggested future collaboration with public sector banks to extend services into unserved and underserved areas, contributing to a broader and more inclusive rural banking network.