Kolkata: The Reserve Bank of India (RBI) said on Wednesday that about Rs1,800 crore would be required to strengthen the balance sheets of regional rural banks (RRBs), even as the banking regulator acts to revive urban cooperative banks (UCBs).

“There are 96 RRBs in the country and only some require recapitalization. Total

Talking shop: RBI’s Thorat (left) with West Bengal finance minister Dasgupta at the centenary celebrations of state level bankers?in?Kolkata.

“The RRB board should decide on capital infusion. Recapitalization is needed though they are growing through normal profit," Thorat added.

However, she did not clarify whether the central bank would make RRBs’ recapitalization mandatory.

In West Bengal, three RRBs would require Rs320 crore. The Centre would need to infuse Rs50 crore into the capital of these banks in order to support the process, Thorat said.

The role of RRBs was significant in achieving financial inclusion and RBI was keen to spread financial literacy to help this process. “We are ready to provide content, information booklets, CDs, but this should be distributed by state authorities and should also be incorporated in the school curriculum," she said.

Speaking on UCBs, Thorat said the regulator might wind up banks that could not be revived or merged.

“We will classify weak UCBs on a case-by-case basis and it will be seen whether they can be strengthened, merged and fresh funds infused," she said. “UCBs are usually small, with dual control by registrars of cooperative societies and RBI. There are various reasons for their weakness and poor governance. This needs to be addressed. We have already initiated the process," she added.

There are about 1,800 UCBs in the country and RBI has signed MoUs with 13 state governments for better regulatory and strengthening process.

The RBI deputy governor, while acknowledging the need for better credit flow to the SME (small and medium enterprises) sector, called for specific products and improvements in the situation.

West Bengal finance minister Asim Dasgupta urged bankers to target financial inclusion in each district of the state by the end of the 11th Plan.