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What are eligibility criteria for offering Internet Banking facility by RRBs?

Reserve Bank of India (RBI) has revised the eligibility criteria applicable to Regional Rural Banks (RRBs) for offering Internet Banking facility to their customers.

What are Regional Rural Banks (RRBs)?

Regional Rural Banks (RRBs) are constituted under the Regional Rural Banks Act, 1976.

RRBs were setup with a view to developing the rural economy by providing credit and other facilities, particularly to the small and marginal farmers, agricultural labourers, artisans and small entrepreneurs. 

Who contribute to the equity of RRBs?

The equity of the RRBs is contributed by the Central Government, State Government concerned and the sponsor bank in the proportion of 50:15:35. 

Who regulates and supervises RRBs?

The function of financial regulation over RRBs is exercised by Reserve Bank of India (RBI) and the supervisory powers have been vested with National Bank for Agriculture and Rural Development (NABARD).

What are eligibility criteria for offering Internet Banking facility by RRBs?

The revised eligibility criteria to seek approval for providing Internet Banking with transactional facility by RRBs to their customers are as under –

  1. Full implementation of Core Banking Solutions (CBS) and migration to IPv6.
  2. Compliance with minimum prescribed CRAR requirement.
  3. Net worth of ₹50 crore or more as on March 31 of the previous financial year.
  4. Net NPA of not more than 5% as on March 31 of the previous financial year.
  5. Net profit in the two immediately preceding financial years.
  6. No instance of default in maintenance of CRR / SLR during the immediately preceding financial year.
  7. The bank shall have a satisfactory track record of regulatory compliance and there shall be no instances of monetary penalty imposed for violation of RBI directives / guidelines during the two preceding financial years.
  8. The bank shall have a sound internal control system approved by a CISA qualified independent auditor.

From when are the revised guidelines applicable?

The guidelines are applicable to all RRBs with effect from November 01, 2022.


References

Reserve Bank of India. (2018, January 15). 'Functions and Workings of RBI'. Retrieved from https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/RWF15012018_FCD40172EE58946BAA647A765DC942BD5.PDF

Reserve Bank of India. (2022, November 01). 'Eligibility Criteria for offering Internet Banking Facility by Regional Rural Banks, 2022'. Retrieved from https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12407&Mode=0


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