VISIT WEBSITE >>>>> http://gg.gg/y83ws?26852 <<<<<<
In the early s, more than RRBs were in existence. The authorities amalgamated these banks in a phased manner. Accordingly, in January , 25 RRBs were merged into 10 banks. Thus reducing the number from to 67 in phase 1 itself. They were further reduced to 56 banks in March in phase 2. In the third phase, the RRBs were merged and the number reduced to Hence, currently, there are 43 RRBs operating in the country.
As the Regional Rural Bank is a scheduled commercial bank, it is primarily responsible for accepting deposits and disbursing loans. The important functions of the RRBs are as below:. Read more Digital Banking , here. Let us learn about some of the major differences between Regional Rural Banks and Commercial Banks with respect to purpose, scope, stakeholding, etc.
We hope that the above banking awareness study notes on Regional Rural Banks in India are helpful for candidates preparing for the relevant competitive exams. In addition to this, candidates are also advised to download the latest version of our Testbook App to be abreast with the study-related content. Resources like mock tests, practice sets, quizzes, live coaching, study notes, etc.
Get it now! Sign Up for Free Already have an account? Sign In. Open in App Create free Account. Search for:. Get Pass Pass. 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. These Regional Rural Banks RRBs have been receiving a high degree of importance and attention in the rural credit system.
Considering the gross absence of banking facilities in the rural areas of the country, the Reserve Bank of India in consultation with the Central Government, State Governments and some major nationalized sponsored banks had set up some Regional Rural Banks in the late s with a view to elevate the economic status of the rural poor as well as to inculcate a habit of saving among the rural masses.
As per the recommendations of the Working Group on Rural Banks, the regional rural banks were established in for supplementing the commercial banks and co-operatives in supplying rural credit.
The main objective of regional rural banks in India is to advance credit and other facilities, especially to small and marginal farmers, agricultural labourers, artisans and small entrepreneurs in order to develop agriculture, trade, commerce, industry and other usual productive activities in different rural areas of the country. The share capital of RRB is subscribed in the following manner—as the Central Government—50 per cent, the State Government concerned—15 per cent and the sponsoring commercial bank—35 per cent.
The regional rural banks are maintaining its special charter it their of operation is very much limited to a definite region, grant direct loan to rural people at concessional rates and receive subsidies and concessions from the Reserve Bank and the sponsoring bank.
In the mean time, the regional rural banks have extended their network throughout the country to a considerable extent. Initially, there were regional rural banks operating in 28 states with nearly 14, branches.
Till June , these RRBs have been lending annually nearly Rs crore to the rural people and more than 90 per cent of the loan has been advanced to weaker sections. As on September, , the RRBs had advanced jointly to the tune of Rs 3, crore in the form of short-term crop loans, term loans for agricultural activities, for rural artisans, cottage and village industries, retail trade, self-employment projects and consumption loans etc.
Among all the states, Uttar Pradesh is the state where larger number of RRB branches has already been opened. Recently, after amalgamation, the number of RRBs has been reduced to During the last 30 years, RRBs have been participating actively in various programmes designed for providing credit assistance to identified beneficiaries included under the new 20 Point Programme, IRDP and other programmes designed for scheduled castes and tribes.
RRBs are also advancing loans to weaker sections and physically handicapped persons under differential rate of industrial DIR schemes. At the end of June , there were 92 amalgamated RRBs, covering districts of the country with a network of 18, branches. Out of all these branches of RRBs, 4, are the rural branches as on June 30, which constitute about The loans and advances stood at Rs 7, Consequent upon the permission of the Reserve Bank of India to determine their own lending rate with effect from 26 August , most of the RRBs have been charging interest rates on their loans varying between In recent years, under the softer interest regime, interest rates on loans advanced by RRBs have also declined considerably.
Again, total amount of credit advanced to the agriculture by the RRBs increased considerably from Rs 6, In order to make Financial Inclusion Plan of the government effective and to expand the penetration of banking network in unbanked and under-banked rural areas, regional rural banks RRBs also worked out its branch expansion plan for and with 10 per cent increase over the previous year. Accordingly, RRBs could open branches in against its target of opening branches. This figure compares favorably with that of opening of branches in and branches in For , a target of opening new branches has also been set.
Regional Rural Banks have made commendable progress in advancing various types of loan to the weaker and under privileged section of the rural society. Although RRBs were set up in order to provide a low cost alternative to the operation of commercial bank branches, particularly in the rural areas but the functioning of RRBs was not up to the mark. Thus the Narasimham Committee is of the opinion that the viability of RRBs should be improved without sacrificing the basic objective.
The Government should also try to evolve a rural banking structure and base of RRBs with adequate financial strength and management and organisational skills of the commercial banks. Regional Rural Banks have also established functional superiority over other commercial banks of the country.
This superiority of RRBs has been brought out by the share of deposits contributed by these branch offices of RRBs in different states.
This achievement is noteworthy if we consider that the number of branches of RRBs 1, was even lower than that of other scheduled commercial banks 1, Moreover, the share of deposits of RRBs in Haryana was also higher than other scheduled commercial banks which had comparatively double the number of branches.
Another important matter that has also been noticed is that most of the branches of RRBs are opened in unbanked centres and thus the deposits mobilised by them are fresh deposits and are not diverted from the deposits per branch of RRBs established before is uniformly higher in almost all the states of the country. In respect of credit operations, RRBs were successful in identifying the target groups and also in meeting their credit requirements.
They are now far from fulfilling purpose for which they were set up some two decades ago. These RRBs have been incurring heavy losses year after year. In , the RRBs incurred a total loss of Rs It is, therefore, not surprising that these banks, established for the purpose of providing an impetus to rural growth have dismally failed to boost agro-based rural economy. One of the major contributory factors responsible for the mounting losses suffered by the RRBs has been very high overheads; in which a sizeable component is salaries.
Employees of RRBs earlier received lower scales of salaries compared to their counterparts in the scheduled nationalized banks.
Comments