CGTMSE Ref. No. 44/GF/1057 November 19, 2015

All the Member Lending Institutions – Regional Rural Banks

Kind Attention: Head, SME/Priority Sector Dept.

Circular No.103 / 2015-16

Madam / Dear Sir,

Re-registration of Regional Rural Banks (RRBs

As you are aware, consequent upon merger/amalgamation of several of the Regional Rural Banks (RRBs), the performance of RRBs was reviewed by the Trust and a new set of guidelines with reference to modifying registration/re-registration criteria of RRBs as Member Lending Institutions (MLIs) were issued by the Trust vide its Circular No.72/2013-14 dated January 02, 2014 and Circular No. CGTMSE/(44)/3330 dated June 10, 2014.

The Trust received few representations from its stake holders with regard to reconsideration of one of the eligibility criteria's viz. Net Profit for at least previous three financial years for all the RRBs getting merged. The Trust has reviewed the position and it has now been decided that the registration / re-registration of newly formed entity after the merger shall be allowed, without reference to the profit / (loss) record of RRBs getting merged, provided the newly formed entity has a positive net worth as per its audited Balance Sheet post merger and provided there are no carry forward losses in the Balance Sheet of newly formed entity post merger.

However, the Trust shall approve guarantees, for such RRBs, only in respect of credit facilities sanctioned by the concerned RRB on or after the date of its registration/re-registration with CGTMSE as its MLI. The Trust shall de-register the RRB the moment it records negative net worth at a future date. The other eligibility criteria, as advised by us vide our circular No. CGTMSE/(44)/3330 dated June 10, 2014 shall remain unchanged.

The contents of this circular may please be brought to the notice of all your Offices

Yours faithfully,
General Manager