The committee highlighted the successful completion of the structural consolidation of Regional Rural Banks (RRBs) and recommended measures to further improve their functioning.

• RRBs have been consolidated from 43 to 28, creating highly viable entities across 11 States.
  • They have been consolidated in a phased manner based on the recommendations of the Dr. Vyas Committee.
• Consolidation is derived from the vision of One State-One RRB. 

Key Recommendations

• Mitigate Sectoral Risks in Education Loans: RRBs should actively mitigate these risks by fully leveraging their inclusion in the Credit Guarantee Fund Scheme for Education Loans (CGFSEL).
  • It will address vulnerabilities such as the high Gross Non-Performing Assets (GNPA) of 13.8% in priority sector education loans.
  • Under the CGFSEL, Central Government gives a guarantee for the education loans availed by students without any collateral security and third-party guarantee for a maximum loan limit of Rs. 7.5 Lakh. 
• Deploy AI-Driven Technologies: Deploy AI-driven automated Early Warning Signals (EWS) to monitor asset quality and manage credit risk effectively.
• Pursue Initial Public Offerings (IPOs): The government shall guide highly profitable RRBs toward IPOs to attract market capital and enforce higher standards of corporate governance.