Govt Unveils ‘RRB Viability Plan 2.0’ to Boost Rural Banking Stability

New Delhi: The Department of Financial Services (DFS) has approved an updated Viability Plan 2.0 for Regional Rural Banks (RRBs), covering the period from 2025–26 to 2027–28, with the aim of improving financial strength, governance standards, and long-term competitiveness.

The revised framework builds on the earlier three-year plan (FY22–FY25), which helped enhance the financial performance of RRBs and established stronger monitoring systems. According to the Ministry of Finance, that initial phase played a crucial role in stabilising operations and improving oversight.

With new challenges emerging in the financial sector, the government has decided to extend and refine the framework to maintain efficiency and accountability across the rural banking network.

The new plan introduces a structured evaluation system based on 30 performance indicators, grouped into four core areas—operational efficiency, asset quality, profitability, and growth. Together, these metrics offer a more comprehensive view of each bank’s performance and overall health.

Key benchmarks under the framework include capital adequacy (CRAR), credit-deposit ratio, digital adoption, non-performing assets (NPAs), recovery efficiency, and profitability. The plan also measures how effectively RRBs implement central government schemes, aligning their operations with national development priorities.

The government stated that the updated framework is designed to ensure a more transparent and balanced monitoring process while pushing banks to improve efficiency. Covering 28 RRBs, the initiative is expected to strengthen financial stability in the rural banking sector.

Ultimately, the move aims to expand rural credit access, accelerate digital financial inclusion, and improve banking outreach in underserved regions.

With inputs from IANS