Regional Rural Banks (RRBs)

  • RRBs were set up as government-sponsored, regional based rural lending institutions under Regional Rural Banks Act, 1976.
  • These are financial institutions which ensure adequate credit for agriculture and other rural sectors.
  • They were set up on the basis of recommendations of Narasimhan Working Group.
  • Objective:
    • They have been created with a view to serve primarily rural areas of India with basic banking and financial services.
    • They fulfill credit needs of relatively unserved sections in rural areas-small and marginal farmers, agricultural labourers and socio-economically weaker sections and small entrepreneurs in rural areas for development of agriculture, trade, commerce, industry and other productive activities.
    • RRBs can also set branches set up for urban operations and their area of operation may include semi urban or urban areas too.
  • Ownership:
    • RRBs are jointly owned by Central Government, concerned State Government and Sponsor Banks with the issued capital shared in the proportion of 50%, 15% and 35% respectively.
  • Priority Sector Lending: The RRBs are required to provide 75% of their total credit as priority sector lending(PSL).

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top