Regiona l Rural Banks

 The state bank group and nationalized banks were required to sponsor and set up RRBs in partnership with individual states to provide low-cost financing and credit facilities to the rural masses.  Regional Rural Banks were established under the provisions of an Ordinance promulgated on the 26th September 1975 and the RRB Act. 1976 .Regional Rural Banks (RRBs):  The government of India appointed Narashimam Committee in 1975 which recommended the formation of Regional Rural Banks.

and for matters connected therewith and incidental thereto´ (RRB Act. particularly to small and marginal farmers. 1976) . commerce. agricultural labourers. credit and other facilities. industry and other productive activities in the rural areas. for the purpose of development of agriculture. trade.They were established ³with a view to developing the rural economy by providing. artisans and small entrepreneurs.

Mobilize financial resources from rural / semiurban areas and grant loans and advances to small and marginal farmers. agricultural labourers and rural artisans. Bridging the credit gap in rural areas Check the outflow of rural deposits to urban areas Reduce regional imbalances and increase rural employment generation    .OBJECTIVE   To ensure sufficient institutional credit for agriculture and other rural sectors.

the concerned State Government and Sponsor Banks (27 scheduled commercial banks and one State Cooperative Bank)  Issued capital of a RRB is shared by the owners in the proportion of 50%. 15% and 35% respectively .OPERATION AND CONTROL Area of operation of RRBs is limited to the area as notified by GOI covering one or more districts in the State.  Jointly owned by GoI.

 From 2005 the RRBs were amalgamated. . of which more than 80 per cent branches were established in rural areas. 2007. 2008). In the first 15 years. with the merger of 153 RRBs in the country (RBI. there were 47 amalgamated RRBs. As on November 30. to improve the operational efficiency and to achieve the economies of scale. the expansion of RRB peaked to 196 with 14.473 branches.

FUNCTIONS Every RRB is authorized to carry on to transact the business of banking as defined in the Banking Regulation Act and may also engage in other business specified in Section 6 (1) of the said Act. .

and . and to cooperative societiesà including agricultural marketing societiesà agricultural processing societiesà cooperative farming societiesà primary agricultural credit societies or farmers¶ service societiesà primary agricultural purposes or agricultural operations or other related purposes.(a) granting loans and advances to small and marginal farmers and agricultural laborersà whether individually or in groups.

.b) granting loans and advances to artisansà small entrepreneurs and persons of small means engaged in tradeà commerceà industry or other productive activitiesà within its area of operation.

Within the 40% priority target.ƒThe Reserve Bank of India has brought RRB¶s under the ambit of priority sector lending on par with the commercial banks. 25% should go to weaker section or 10% of their total advances to go to weaker section. They have to ensure that forty percent of their advances are accounted for the priority sector. .

There are 30 Regional Rural Banks in India. apart from the State Bank of India also functions as the promoter of rural development in India. under the State Bank of India and it is spread in 13 states across India. ƒ The number of branches the SBI Regional Rural Banks is more than 2000.REGIONAL RURAL BANKS IN INDIA ƒ The State Bank of India is one of the major commercial banks having regional rural banks. . ƒ Several other banks.

LIST OF RRB¶S IN INDIA ƒ United Bank of India ƒ Syndicate Bank ƒ Pallavan Grama Bank ƒ Regional Rural Banks in Tamil Nadu ƒ Sindhanur Urban Souharda Co-operative Bank ƒ National Bank for Agriculture and Rural Development ƒ Haryana State Cooperative Apex Bank Limited .

RRB¶S IN KERALA Narmada Malwa Gramin Bank North Malabar Gramin Bank .

. have been impressive. In semi-urban areas. Thus. the performance of RRBs under GoI's initiative on doubling of agriculture credit in three years (from base year 2003-04) and greater coverage of small and marginal farmers. RRBs account for a substantial 37% of total offices of all scheduled commercial banks. In rural areas. RRBs have achieved the target of doubling of agriculture credit in 2 years.More importantly. their share comes to 15%.


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