MEANING OF REGIONAL RURAL BANKS
The Regional Rural Banks (RRBs) were established on the recommendations of Narsimha Committee on Rural Credit under the provisions of an Ordinance passed on 26 September 1975 and the RRB act 1987.
RRBs are basically Indian Scheduled Commercial Banks (Government banks) operating at regional level in different states of India.
These banks were established with an objective of providing easily accessible banking and credit services to the people living in the rural and remote areas of the country, thereby forming a vital component of the financial service sector in India.
STRUCTURE AND OWNERSHIP OF RRBs
The organisation of Regional Rural Bank comprises of Board of Directors, Chairperson, Managing Director, Manager, Regional Managers, and the assistant’s staff.
The authorised capital of an RRB is fixed at Rs. 1 crore and its issued capital at Rs. 2 lakhs. Of the issued capital, 50 per cent is to be subscribed by the Central Government, 15 per cent by the concerned State Government and the rest 35 per cent by the sponsoring bank.
FUNCTIONS OF RRBs
The various functions performed by the Regional rural banks are mentioned below –
- Carrying out government operations like disbursement of wages of MGNREGA workers, distribution of pension etc.
- Granting loans and advances to small and marginal farmers, Agricultural labourers, Co-operative societies and to individuals including artisans, small entrepreneurs and persons of small means.
- Accepting deposits from the members who hold an account in the bank.
- Providing agency services and general utility services to their customers such as locker facilities, foreign exchange, bill payments etc.
***Currently there are 43 RRBs in India and each RRB is sponsored by Government of India along with State Government and Sponsor bank. These banks are regulated by RBI and supervised by National Bank for Agriculture and Rural Development (NABARD). All the states have RRBs in India now except Sikkim and Goa.