Regional Rural Banks (RRBs) were created in India to serve rural areas with basic banking and financial services. RRBs have a limited area of operation within one or more districts in a state. They were conceptualized to meet the credit needs of small farmers, landless laborers, and artisans in rural India, with a focus on the agricultural sector. RRBs are jointly owned by the central government, state government, and a sponsoring bank. They provide banking facilities, carry out government operations, and offer para-banking facilities to support the development of rural areas.
Regional Rural Banks (RRBs) were created in India to serve rural areas with basic banking and financial services. RRBs have a limited area of operation within one or more districts in a state. They were conceptualized to meet the credit needs of small farmers, landless laborers, and artisans in rural India, with a focus on the agricultural sector. RRBs are jointly owned by the central government, state government, and a sponsoring bank. They provide banking facilities, carry out government operations, and offer para-banking facilities to support the development of rural areas.
Regional Rural Banks (RRBs) were created in India to serve rural areas with basic banking and financial services. RRBs have a limited area of operation within one or more districts in a state. They were conceptualized to meet the credit needs of small farmers, landless laborers, and artisans in rural India, with a focus on the agricultural sector. RRBs are jointly owned by the central government, state government, and a sponsoring bank. They provide banking facilities, carry out government operations, and offer para-banking facilities to support the development of rural areas.
What are RRB’s • Regional Rural Banks are local level banking organizations operating in different States of India. • Created with a view to serve primarily the rural areas of India with basic banking and financial services. • The area of operation of RRBs is limited to the area as notified by Government of India covering one or more districts in the State. • Narsimham committee conceptualized the foundation of regional rural banks in India Structure of RRB’s • The authorized capital -fixed at Rs. 1 crore • Issued capital at Rs. 2 lakhs ▫ 50 %– be subscribed by the Central Government, ▫ 15 %by the concerned State Government ▫ Rest 35%by the sponsoring bank. • RRB are directed and managed by a Board of Directors consisting Chairman The chairman is appointed by the Central Government and his term of office does not exceed five years. Three directors nominated by the Central Government not more than two directors to be nominated by the State Government concerned not more than 3 directors to be nominated by the sponsoring bank. Role of RRB’s • Providing banking facilities to rural and semi-urban areas. ▫ RRB’s were mainly established to meet the credit requirement of small and marginal farmer, landless labor and artisians of rural India with a focus on agro sector. • Government operations ▫ Carrying out government operations like disbursement of wages of MGNREGA workers, distribution of pensions etc. • Facilities ▫ Providing Para-Banking facilities like locker facilities, debit and credit cards • All round development ▫ Rural banking institutions are playing a very important role for all-round development of rural areas of the country. In order to support the rural banking sector in recent years, Regional Rural Banks have been set up all over the country with the objective of meeting the credit needs of the most under privileged sections of the society. • Flow of credit ▫ These were envisaged as low cost financial intermediation structure in rural areas to ensure sufficient flow of institutional credit for agriculture and other rural sectors. • Local effect ▫ RRB’s were expected to have the local feel and familiarity of cooperative banks with managerial expertise of the commercial banks. • Growth ▫ RRB’s penetrat4ed to every corner of the country and extended a helping hand in the growth process of the country.