The expansion was discussed in New Delhi at a meeting attended by leaders of all 28 RRBs. Sanjay Lohiya, Secretary in the Department of Financial Services, chaired the discussion and urged rural banks to give small-business credit greater attention at branch level.

The proposed approach brings together RRBs’ local networks and SIDBI’s experience in financing smaller enterprises. Both lenders would contribute capital and share lending risk. For rural banks with a strong agricultural focus, a larger MSME book could also help spread exposure across different business activities.

Loan assessment would use a digital rule engine, applying predefined checks to support credit quality. Banks would also draw on information about local business clusters to identify potential borrowers. RRBs were encouraged to support manufacturing and take part in Rozgar Melas to improve financial awareness among small entrepreneurs.

SIDBI’s digital loan-origination platform supports paperless processing and quick preliminary approval after applicants submit information online. Digital documents and direct account disbursement are intended to reduce branch visits and manual processing. SIDBI Chairman and Managing Director Manoj Mittal called for active participation from every RRB, with expansion focused on micro and small businesses.