RBI/2013-14/382
RPCD.CO.RRB.BC.No.60/03.05.33/2013-14

November 26, 2013

The Chairman
All Regional Rural Banks

Dear Sir/Madam,

Imposition of Minimum Capital Adequacy Measure of 9% for RRBs

The risk weighted assets ratio system as the basis of assessment of Capital Adequacy which takes into account the element of risk in the various types of assets in the Balance Sheet as well as off Balance-sheet exposures was made applicable to banks in India with a view to strengthening their capital base.

2. Capital Adequacy norms were advised to RRBs vide our circular RPCD.CO.RRB.BC.44/05.03.095/2007-08 dated December 28, 2007. RRBs were required to disclose CRAR as ‘Notes on Accounts’ to their Balance Sheets. It was also advised that the desired level of CRAR norms would be communicated in due course.

3. Consequent to the consolidation of RRBs by amalgamation and recapitalization of weak RRBs, it has been decided to prescribe a minimum CRAR for RRBs. All RRBs are, therefore, advised to achieve and maintain a minimum CRAR of 9% on an ongoing basis with effect from March 31, 2014.

4. The other contents of our circular dated December 28, 2007 remain unchanged.

5. Please acknowledge receipt to our Regional Offices concerned.

Yours faithfully

(A. Udgata)
Principal Chief General Manager