1. The Regional Rural Banks (RRBs) hold shares in the ratio as follows: Central Government – 50%, state government – 15% and sponsor banks – 35%
2. Capital to Risk weighted Assets Ratio (CRAR) – A Committee under the chairmanship of K.C. Chakrabarty, Deputy Governor of RBI was constituted in September 2009 to highest measure including re-capitalization of RRBs to bring the CRAR of RRBs to at least 9%, by about 2012. The committee submitted its report in May 2010. The recommendations are:
3. RRBs to have CRAR of at least 7% as of 31st March 2011 and at least 9% from 31st March 2012 onwards, recapitalization requirement of Rs. 2200 crore for 40 of the 82 RRBs. This amount is to be released in two installments in 2010-11 and 2011-12.
4. The remaining 42 RRBs will not require any capital and will be able to maintain CRR of at least 9% on 31st March 2012 and thereafter on their own.
5. A fund of Rs. 100 crore to be set up for training and capacity building of the RRB staffs.
6. The Government of India recently approved the recapitalization of RRBs in the following manner:
7. Share of Central Government, Rs. 1100 crore will be released in 2011 and 2012. Thus Government of India release will be contingent to release of share of state government and sponsoring banks.
8. A capacity building fund with a corpus of Rs. 100 crore to be set up by Government of India with NABARD towards training RRB staff.
9. Additional Amount of Rs. 700 crore as contingency fund to meet the requirements of weak RRBs.