Cabinet Approval Current Affairs - 2020

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Recapitalization of Regional Rural Banks approved by Union Cabinet

The Union Cabinet under the chairmanship of PM Modi on March 25, 2020, approved the recapitalization of regional rural banks (RRB) to improve the capital to risk weighted assets ratio.

Highlights

The Committee approved the continuation of recapitalization of RRBs. In order to achieve this the GoI has provided a minimum regulatory capital for another, 2020-21. The recapitalization funds are being allocated to those banks that are unable to maintain minimum CRAR (Capital to Risk weighted Assets Ratio) of 9%. The CRAR for a bank is fixed by RBI.

Benefits

An improved CRAR will help the rural banks to meet their credit requirements in rural areas. The RRBs should allocate 75% of their credit to priority sector lending. The RRBs focus on small and marginal farmers, micro and small enterprises, weaker sections of the society and rural artisans

Scheme of Recapitalization

The Scheme of Recapitalization of RRBs was launched in 2011. It was launched on the recommendation of Dr K C Chakrabarty Committee.

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Union Cabinet approves extra supply of subsidized Food Grains to Ration Shops

On March 25, 2020, the Union Cabinet approved extra supply of food grains via rations shops. The monthly quota of subsidized food grains is to be increased from 2 kg to 7 kg. The step has been taken to help people during the lock down.

Highlights

The GoI has decided to provide 7 kg of food grains per person during the lock down. This will benefit more than 80 crore people in the country. Also, the food grains are to be provided at subsidized rates. The cost of wheat was Rs 27 per kg and is now to be sold at Rs 2 per kg. The cost of rice is about Rs 32 per kg and is to be sold at Rs 3 per kg. Currently, GoI is providing food grains at subsidized rates under National Food Security Act.

National Food Security Act

The act aims to provide nutritional security. It provides coverage up to 75% of rural population and 50% of urban population.

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