The Reserve Bank of India is considering a proposal for a cut in cash reserve ratio for the regional rural and scheduled co-operative banks.
Sources said the regulator was empowered to take a decision on monetary measures for selective banking sectors after the amendments to the RBI Act and the Banking Regulation Act in the last monsoon session.
The proposal is being considered with the objective of releasing additional lendable resources to these banks to make them facilitators for the rural lending.
Post amalgamation of the RRBs, the sector has been facing a funds crunch for onlending to the farm sector. The selective cut in CRR could be worked out as a special dispensation.
Since financial inclusion has been one of the key areas for the banking regulator now, banks across the board have been directed for better involvement in rural lending by encompassing more and more unbanked areas.
It is also surmised that the regulator may make it mandatory for branches of every bank based in rural areas to bring around 50 households under its ambit every month.
These regions are highly unbanked as statistics show that 18,000-20,000 people get to bank with a single branch in north-east, for example, as against an all-India average of 14,000 people.
Moreover, as an alternative option, the RBI is thinking of a corporate-banking model to push mobile banking to skirt the difficulties posed by inadequate physical infrastructure for branch banking in far flung areas.
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