The Department of Financial Services has given the green light to a revised Viability Plan 2.0 for Regional Rural Banks covering the period from 2025-26 to 2027-28. This move aims to enhance financial sustainability, governance, and long-term competitiveness for these banks. Building upon the previous three-year viability framework, which ran from FY22 to FY25, the new plan focuses on strengthening financial performance and monitoring mechanisms across Regional Rural Banks.
The Ministry of Finance highlighted the positive impact of the earlier framework in boosting financial performance and enhancing monitoring mechanisms across the banks. In response to evolving challenges in the financial sector, the government has extended and refined the framework to ensure ongoing oversight and efficiency. The newly approved Viability Plan 2.0 introduces a structured framework based on 30 performance parameters, categorized under operational excellence, asset quality, profitability, and growth.
The parameters within the new plan are strategically designed to offer a comprehensive evaluation of the overall health and operations of Regional Rural Banks. The Department of Financial Services has now approved the revised Viability Plan 2.0 for an additional three-year period, from 2025-26 to 2027-28, with the goal of bolstering financial sustainability and long-term competitiveness of these banks. Key metrics under this framework include capital adequacy ratio, credit-deposit ratio, digital adoption levels, non-performing assets, recovery performance, and profitability indicators.
The revised plan also takes into account the banks’ performance in implementing various Government of India schemes, aligning operational objectives with national priorities. By creating a balanced and transparent monitoring system, the government aims to drive performance improvements and efficiency enhancements across the network of 28 Regional Rural Banks. This initiative is anticipated to reinforce financial stability in the rural banking sector, empowering Regional Rural Banks to facilitate rural credit expansion, promote digital inclusion, and enhance financial access in underserved regions.
