Question

Explain the Role of RRB'S towards rural development

Answer 1

INTRODUCTION

Generally this term paper deals with the regional rural banks of India .How do they work in India , what are the roles played by the banks in the rural development of India ,problems faced by them ,performance of regional rural banks ,and all the things are covered under this term paper in brief including suggestions and conclusion…by analyzing this term paper one will come to know about the working of regional rural banks and also the role played by them…

REGIONAL RURAL BANKS

The government of India set up Regional Rural Banks (RRBs) on October 2, 1975. The banks provide credit to the weaker sections of the rural areas, particularly the small and marginal farmers, agricultural laborers, artisans and small entrepreneurs.

Initially, five RRBs were set up on October 2, 1975 which were sponsored by Syndicate Bank, State Bank of India, Punjab National Bank, United Commercial Bank and United Bank of India. The total authorized capital was fixed at Rs. 1 crore which has since been raised to Rs. 5 Core.

There are several concessions enjoyed by the RRBs by Reserve Bank of India such as lower interest rates and refinancing facilities from NABARD like lower cash ratio, lower statutory liquidity ratio, lower rate of interest on loans taken from sponsoring banks, managerial and staff assistance from the sponsoring bank and reimbursement of the expenses on staff training. The RRBs are under the control of NABARD. NABRAD has the responsibility of laying down the policies for the RRBs, to oversee their operations, provide refinance facilities, to monitor their performance and to attend their problems.

RRBs are jointly owned by , the concerned State Government and Sponsor Banks (27 scheduled RBBs and one State Cooperative Bank); the issued capital of a RRB is shared by the owners in the proportion of 50%, 15% and 35%respectively.

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