DFS Launches Viability Plan 2.0 to Strengthen Regional Rural Banks

The Department of Financial Services (DFS) had earlier launched a three-year Viability Plan for Regional Rural Banks (RRBs) from 2021-22 to 2024-25. The main objective of this plan was to increase the financial condition of rural banks and make their work more efficient and transparent. Over the years, the plan helped several RRBs to improve their performance and strengthened the system for monitoring their progress.

Considering the new challenges in the banking and financial sector, DFS has now introduced a revised plan titled ‘Viability Plan 2.0’. This new plan will continue for another three years, from 2025-26 to 2027-28.

Viability Plan 2.0 includes 30 performance indicators that will be used to measure the functioning of RRBs.

These indicators are grouped under four major areas:

1. Operational excellence
2. Asset quality
3. Profitability
4. Growth

Some of the important areas that will be monitored include the CRAR, credit-deposit ratio, use of digital banking services, level of NPAs, loan recovery performance, profit-related ratios, and how effectively banks implement Government of India schemes.