India’s Finance Minister has emphasized the need for digital enhancement in Regional Rural Banks (RRBs) to enhance Pradhan Mantri Mudra Yojana’s reach. RRBs are government-owned banks operating at regional levels, catering to rural areas with essential financial services. Originating from the Narasimham Committee’s recommendation, RRBs were established to provide rural banking access. They offer banking facilities, governmental functions, credit services, and more. Pradhan Mantri Mudra Yojana, launched in 2015, further bolsters financial inclusion by supporting non-farm sector income-generating activities. The scheme’s three loan categories empower individuals for diverse entrepreneurial pursuits, contributing to rural economic growth.
Facts/Terms for UPSC Prelims
- Pradhan Mantri Mudra Yojana (PMMY): An Indian government initiative launched in 2015 to promote financial inclusion by offering loans to individuals for non-farm sector activities, categorized into Shishu, Kishor, and Tarun.
- Regional Rural Banks (RRBs): Government-owned scheduled commercial banks serving rural areas, established to provide basic banking services, credit facilities, and governmental functions.
- Narasimham Committee: A committee formed in 1975 to evaluate India’s banking sector and recommend reforms, leading to the creation of RRBs as a key outcome.
- Financial Inclusion (FI): A program aimed at extending financial services like banking, loans, and insurance to underserved and low-income segments of the population.
- Micro Units Development & Refinance Agency Ltd. (MUDRA): A government institution supporting PMMY by refinancing loans provided to micro and small business units through various financial institutions.