25 March 2020
New Delhi: The Cabinet Committee on Economic Affairs on Wednesday approved the recapitalisation of regional rural banks with total outlay of Rs 1,340 crore, to improve their capital adequacy during the coronavirus crisis.
Briefing the media after the cabinet meeting, Information and Broadcasting Minister Prakash Javadekar said that out of the total approved Rs 1,340 crore, the Central government will infuse Rs 670 crore and the rest would be put in by the state government and other sponsoring banks.
"#CCEA approves recapitalisation of Regional Rural Banks to improve their Capital to Risk Weighted Assets Ratio; approves utilisation of Rs 670 crore as Central Government share for the scheme," said a statement.
The decision comes a day after Prime Minister Narendra Modi announced a 21-day lockdown to control the spread of the coronavirus infection. Businesses and normal life across the country are likely to suffer and concerns have been raised about the flow of liquidity during the crisis period.
The government has off late announced a slew of measures to provide relief to the general public and businesses in terms of regulatory compliances, including deferment of deadlines for IT and GST return filings.
The government is also in the process of preparing an economic package to mitigate the impact of the crisis. On Tuesday, Finance Minister Nirmala Sitharaman, who is also heading the COVID-19 Economic Response Task Force, said that the package would be announced soon.
About 539 cases of the deadly infection have been confirmed in India and 10 deaths have been reported so far.