It has 22 Regional offices, most of these in-state Capitals. … PSCNOTES.in is a free resource site for UPSC and PSC aspirants, founded by Sheshan Pradhan. Regional Rural Banks (RRBs) are scheduled Commercial banks (Government banks) operating at regional level in different States of India.. RRBs perform Various functions in following heads:. National Bank for Agriculture and Rural Development (NABARD) was established on July 12, 1982 with the paid up capital of Rs. IBPS conducts the exam for the recruitment of Officers or Office Assistants in various RRBs. The Regional Rural Banks Act (RRB Act) was passed in 1976. There were five commercial banks, viz. Carrying out government operations like disbursement of wages of MGNREGA workers, distribution of pensions etc. (1) Granting of loans and advances to small and marginal farmers and agricultural labourers, whether individually or in groups, and to co-operative societies, agricultural processing societies, co-operative farming societies, primarily for agricultural purposes or for agricultural operations and other related purposes; (2) Granting of loans and advances to artisans, small entrepreneurs and persons of small means engaged in trade, commerce and industry or other productive activities within its area of co-operation; and. Notification under section 23A to be sufficient notice to concerned parties. Saptagiri Grameena Bank: Chittor . By 1982, to consolidate the various arrangements made by the RBI to promote/ supervise institutions and channel credit to rural areas, NABARD was established. Regional Rural Bank. Punjab National Bank, State Bank of India, Syndicate Bank, United Bank of India and United Commercial Bank, which sponsored the regional rural banks. The Government of India promulgated the Regional Rural Banks Ordinance on26th September 1975, which was later replaced by the Regional Rural Bank Act1976. Regional Rural Bank to be deemed to be a co-operative society for purpose of the Income-tax Act, 1961. Regional Rural Banks Banking Awareness PDF Download. History of RRB. At to the end of June 1985, 183 Regional Rural Banks with a network of10, 245 branches have been opened in the states of the Indian Union. 23C. Amalgamation of Regional Rural Banks. Similarly, the bank lends to a person who needs money (investor/borrower) at an interest rate. Regional Rural Banks are the instruments by which the central and state govts are implementing their myriad social and economic welfare programmes. Due to defaulting and non- repayment of loans, banks often run into debts. The priority sector comprises of small and marginal farmers, craftsmen and artisans, local traders, medium and small scale businesses, education, housing, renewable energy, etc. 75% of the total Bank Credit has to be provided to the Priority Lending Sector. However, the functions of an RRB are limited to a specific area which is specified by the state. However they differ from commercial banks in the following aspects. The idea of establishing rural banks was once again raised in the year 1975 as part of the Prime Ministers "20 Point Economic Programme".A "Working Group on Rural Banks" headed by Sri. Accept Deposits. The RRB Act, 1986, empowers the Central Government to establish in a State or Union Territory one or more RRBs when any sponsor bank makes such a request The sponsor bank assists the RRB in many ways by subscribing to its share capital, by helping in its establishment, by assisting in recruitment and training of its cadre, and in general providing such managerial and financial assistance sought by the RRB. Carrying out government operations like disbursement of wages of MGNREGA workers, distribution of pensions etc… They are created with a mandate to provide essential or basic banking and financial services to the rural areas. Contribution to Capital Markets. Interest-tax not payable. are performed by RRBs. However, the functions of an RRB are limited to a specific area which is specified by the state. Prachi is a Biotechnology student based in Mumbai. Depositors can also be made in fixed or recurring forms. It has reserved Rs 1340 crore and will release of Rs 670 crore out of this fund for the same. • Providing Para-Banking facilities like locker facilities, debit and credit cards. Its major functions are monitoring, policy making, planning the activities and credit system of the rural banks. The Regional Rural Banks in India are the Commercial Banks operating in various rural areas of the country. Five regional rural banks were set up on October 2 with a total authorized capital of ` 1 crore, which later augmented to ` 5 crore. In 2009, a committee was formed under the chairmanship of K. C. Chakrabarty, to analyse the situation of RRBs. Hence, short- term loans on a low rate of interest are extended by these banks to the priority sector. What is Recapitalisation? TOS 7. Regional Rural Banks in Andhra Pradesh (AP) Local Language - Telugu. The ownership of shares of Regional Rural Banks in India is divided among the Central Government, State government, and the sponsoring banks: The sponsor bank helps the growth of an RRB by providing trainings to the staff of an RRB, providing management consultations to the bank for a minimum period of 5 years. Essential Features/functions of the Bank . Regional Rural Banks RRBs were established in 1975 under the provisions of the ordinance promulgated on 26th-sept-1975. RRBs grant loans to small and marginal farmers, Agricultural labourers, Co-operative societies and to individuals including artisans, small entrepreneurs and persons of small means. The Regional Rural Banks in India perform the important function of. It was more accessible to the urban population. In January 2013, 25 RRBs were merged into ten banks, reducing the number to 67 banks in the first phase. The RegionalRural Banks (RRBs) aimed at providing credit and other facilities to the smalland marginal farmers, agricultural labourers, artisans and small entrepreneursin rural areas. RRBs accept deposits from their members who hold an account in the bank. affected economically by COVID- 19. The Sub-committee performs the functions and exercises the powers of supervision and inspection under the Reserve Bank of India Act, 1934 and the Banking Regulation Act, 1949, in relation to Payments Banks, Small Finance Banks, Local Area Banks, small Foreign Banks, select scheduled Urban Co-operative Banks, select Non-Banking Financial Companies and Credit Information Companies. Content Filtrations 6. Regional Rural Banks (RRBs) are scheduled Commercial banks (Government banks) operating at the regional level in different states of India. She is a blogger and a proud nature lover, looking to find fun-filled solutions out of problems. The regional rural banks are the newest form of banks that have been set up in the country on the sponsorship of individual nationalised commercial banks. The first Regional Rural Bank “Prathama Grameen Bank” was set up on October 2, 1975. of India, the Government of concerned state and public sector bank, which sponsored it. The authorised capital of an RRB is fixed at Rs. Amalgamation of Regional Rural Banks. National Bank for Agriculture and Rural Development (NABARD) was established on July 12, 1982 with the paid up capital of Rs. The Regional Rural Banks (RRBs) aimed at providing credit and other facilities to the small and marginal farmers, agricultural labourers, artisans and small entrepreneurs in rural areas. In the 1990s, more than 190 RRBs existed. 1 crore and its issued capital at Rs. There are currently 43 Regional Rural Banks in India. Regional Rural Banks (RRBs) 20. Commercial banks, as we know have no such restrictions they may open branches anywhere in … The chairman is appointed by the Central Government and his term of office does not exceed five years. Functions of rural bank? Chaitanya Godavari Grameena Bank: Guntur : 3. Regional Rural Banks were set up on the basis of the recommendations of the Narasimham Working Group (1975), and after the legislations of the Regional Rural Banks Act, 1976. They provide finance for starting companies in backward areas. Development banks facilitate rural and regional development. They are Indian Government banks, being commercial banks, which operate at a regional level in India’s various states. The banks unable to maintain this ratio have to be considered for recapitalisation. The Regional Rural Banks (RRBs) aimed at providing credit and other facilities to the small and marginal farmers, agricultural labourers, artisans and small entrepreneurs in rural areas. Best current affairs & GK article on Regional Rural Banks ... On September 30, 2020, the Reserve Bank of India excluded six public sector banks from the Second Schedule of RBI Act. RRB is deal to be a cooperative society for the purpose of Income-Tax Act 1961. Regional Rural Banks (RRBs) were set up as government-sponsored, regional based rural lending institutions under the Regional Rural Banks Act, 1976. credit functions, development functions, and supervisory functions. The goals of Rural Banks are to provide banking services to the rural/village population of India. It preconditioned that the proportionate amount is invested by the State government and sponsor banks. 2 SECTIONS 23D. Subs. Contribution to Capital Markets: The development bank contributes to the growth of capital markets. The total number of Regional Rural banks functioning in the country as at the end of June1999 was 196 covering 451 districts spread over 23 states with the network of14,467 branches These banks have been established by the Government of India in terms of the provisions of Regional Rural Banks Act, 1976. The important functions of Regional Rural Banks are discussed below. The amalgamation of these banks was done in a phase-wise manner. RRB's perform various functions in following heads • Providing banking facilities to rural and semi-urban areas. Manipur Rural Bank Keishampat, Imphal West - 795 001 Manipur Website: www.manipurruralbank.com : Meghalaya; 26. This move was to protect the farmers, local businessmen, trader, etc. 1) Reserve Bank of India: The RBI Act 1934 and the Banking Regulation Act 1949 are two principal regulating statutes for commercial banks in India. Regional Development: The development bank facilitates rural and regional development. RRBs perform various functions in following heads: Providing banking facilities to rural and semi-urban areas. NABARD also helps rural banks in their development and supervises their activities on a timely basis. To bridge this gap between the economic development of urban and rural areas of India, Regional Rural Banks were established. 23B. Providing banking facilities to rural and semi-urban areas. 23B. The Government was supposed to release Rs 1100 crore in 2010-11 and 2011-12 for this purpose, but the state government and the sponsor banks also have to release an amount proportionate to the shares held by them. Regional Rural Banks (RRB) Local Area Banks (LAB) Specialized Banks; Small Finance Banks; Payments Banks; This is an important topic for the IAS Exam. 1 crore and the issued capital is Rs. A bank allows a person with excess money (Saver) to deposit his money in the bank and earns an interest rate. Regional Rural Banks can be traced to the need for a stronger institutional arrangement for providing rural credit. To prevent this, the Government, as it is the largest shareholder in RRBs, invests capital in the banks. Regional Rural Banks (RRBs) are constituted to meet the financial and banking needs of weaker sections of the rural areas with a special attention on small and marginal farmers, agricultural labourers, artisans, landless farmers, small traders, tint enterprises etc. Out of this total credit, 10% has to be given to the economically weaker sections. Since a Regional Rural Bank is a Scheduled Commercial Bank, its primary functions are to accept deposits and to disburse loans. These Regional Rural Banks (RRBs) have been receiving a high degree of importance and attention in the rural credit system. Article Shared By. ----- 1. During the tenure of Indira Gandhi’s government with a view to include rural areas into economic mainstream since that time about 70% of the Indian … ADVERTISEMENTS: The RBBs Act has made various provisions regarding the incorporation, regulation and working of RRBs. 25 lakhs; which is held by them in the proportion of 50, 15 and 35 per cent respectively. Let’s look at the functions, and regulation of Regional Rural Banks in India. This was done following their merger with other banks. Every RRB is owned by 3 entities with their respective shares as follows: Central Government -50% State government-15% Sponsor bank -35% Besides this these banks are making banking service available to the masses through their more than 18000 branches and a no of USBs. Structure and Functions of the Regional Rural Banks! The area of operations of RRB is limited to specific region relating to one or more districts in the concerned state. Several other banks, apart from the State Bank of India also functions as the promoter of rural development in India. Cessation of business of transferor Regional Rural Banks. Regional Rural Bank: Provided that the Central Government may, either on its own motion or on the recommendation of the National Bank, extend the said period of five years by such further period, not exceeding five years at a time, subject to such conditions as it may deem fit to impose."] Since a Regional Rural Bank is a Scheduled Commercial Bank, its primary functions are to accept deposits and to disburse loans. Notification under section 23A to be sufficient notice to concerned parties. These are the banking organizations being operated in different states of India. Several other banks, apart from the State Bank of India also functions as the promoter of rural development in India. Other special features of these banks are: (i) The area of operation of each rural bank has been limited to a specified region comprising one or more districts in any anything (iii) The lending rates of these banks cannot be higher than the prevailing lending rates of co-operative credit societies in any particular state; … It basically performs three kinds of roles, i.e. The function of RRB is to provide loans to the small marginal farmers and agricultural laborers. A bank is a financial institution which performs the deposit and lending function. The number of branches the SBI Regional Rural Banks is more than 2000. Regional Rural Banks are a type of commercial banks in India. Privacy Policy 8. They provide finance for starting companies in backward areas. The minimum prescribed Capital to Risk-Weighted Assets Ratio (CRAR), also known as the Capital Adequacy Ratio, for any Scheduled Commercial Bank (which includes RBIs) is supposed to be 9%. In such a case, there is a need for a separate banking system to, RRBs reduce farmers’ and the weaker sections’. Although function of these banks is regulated by the Reserve Bank of India but the operation part of these banks needs much to desire. Meaning of Local Area Banks: In view of the success of co-operative banks in mobilising deposits and creating credit facilities in rural areas it has been established that co-operative banks throughout the country are playing a very important role of rural development and national economy. The merging of two or more banks together is known as amalgamation. Regional Rural Banks (RRBs) are the Indian scheduled commercial government banks operating at regional level in different states of India. 25 RRBs were established within a year from the passing of this Act. Back in the late 20th century, banking was not equally distributed. There were established with an objective of providing easily accessible banking and credit services to the rural population and mobilising financial resources from the urban areas to rural districts of India. The authorised capital of each bank is Rs. Each country has a central bank that regulates all the other banks in that particular country. It provides and regulates credit and gives service for the promotion and development of rural sectors mainly agriculture, small scale industries, cottage and village industries, handicrafts. Regional Rural Banks Act, 1976; Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980; National Bank for Agriculture and Rural Development Act, 1981; National Housing Bank Act, 1987; Recovery of Debts Due to Banks and Financial Institutions Act, 1993; Competition Act, 2002; Indian Coinage Act, 2011: Governs currency and coins CHAPTER VA AMALGAMATION OF REGIONAL RURAL BANKS 23A. 23. Regional Rural Banks comes under scheduled commercial banks. Image Guidelines 5. 100 cr. 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. The Chairman Meghalaya Rural Bank MTC Building, 2nd Floor Police Bazar Shillong - 793 001 Meghalaya Website: www.meghalayaruralbank.co.in : Mizoram; 27. Regional Rural Banks assist rural businesses by providing them short- term loans, insurance facilities, etc., and help to improve the, Providing assistance like loans, advances, insurance to agriculturists for farming inputs, equipment, processing, marketing activities, and cooperative societies helps in the, Many public and private sector banks do not deal with farmers and rural section due to their small financial needs, fewer incomes, etc. RRBs perform Various functions in following heads: Providing banking facilities to rural and semi-urban areas. Financial Intermediation . They invest in equity shares and debentures of various companies listed in India. Prohibited Content 3. 23. They also help the companies in project management in such less-developed areas. Let us take a look at some of the main functions of this organisation. Sponsor bank → 35%; Regional Rural Banks were conceived as low cost institutions having a rural ethos, local feel and pro poor focus. Fun-Filled solutions out of this Act up on October 2nd, 1975 UPSC and PSC aspirants, by... Are Scheduled commercial Government banks operating in various RRBs unable to maintain this ratio to... Foreign exchange, bill payments, money wire transfer, etc however, the functions, and supervisory.. The Govt merging of two or more districts in the concerned state and check out which Regional Rural MTC! Deal to be a co-operative society for purpose of the main functions of local area banks RRB... Level operations across the states in India is flourishing with a large and account! 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