Economics · Banking System in India
A Regional Rural Bank (RRB) in a North-Eastern state has been consistently profitable and has maintained a CRAR well above the regulatory requirement of 9 percent. To further its growth and invest in digital infrastructure, the board of the RRB is exploring the possibility of raising capital through an Initial Public Offering (IPO). This would involve a change in the shareholding pattern, which currently consists of the Central Government, the State Government, and a Public Sector Sponsor Bank. Based on the guidelines for RRBs, which of the following is a prerequisite for an RRB to go public?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The RRB must have a net worth of at least 300 Crore for the previous 3 years.
- 2The RRB must merge with its Sponsor Bank before the IPO can be launched.
- 3The RRB must have a minimum CRAR of 10 percent and have been in profit for the last 3 years.✓
- 4The state government must exit its shareholding completely before the IPO.
Correct answer
The RRB must have a minimum CRAR of 10 percent and have been in profit for the last 3 years.
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