The Union government has provided Rs 670 crore to regional rural banks (RRBs) considering their importance in agriculture finance during these difficult times.

Of the 43 RRBs, about one-third, especially from the northeastern and eastern regions, are facing losses and needed funds to meet the regulatory capital requirement of 9 per cent, sources said.

According to the current scheme for recapitalisation of RRBs, the capital support is provided to these banks by the Centre, the concerned state governments and the sponsor banks in the ratio of 50:15:35 to enable them to meet the regulatory requirement of capital to risk weighted assets ratio (CRAR) of 9 per cent. Sources said matching funds were released by the sponsor banks and many of the state governments.

This round of infusion would take care of their capital needs till March 31, 2021, sources added.

RRBs as a group reported a net loss of Rs 2,206 crore in the fiscal ended March 31, 2020, against a Rs 652-crore net loss in 2018-19, according to data published by the National Bank for Agriculture and Rural Development (Nabard).

The gross non-performing assets as a percentage of gross loans outstanding of RRBs marginally declined to 10.4 per cent as on March 31, 2020, from 10.8 per cent as on March 31, 2019, the data showed.

Deposits and advances of RRBs increased 10.2 per cent and 9.5 per cent, respectively, during 2019-20. The gross outstanding loans stood at Rs 2.98 lakh crore against Rs 2.80 lakh crore in 2018-19.