regional rural bankss

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PRESENTATIONON

Regional Rural Bank

PRESENTED BY: PRESENTED TO:AKANSHA JADHAV RAVI BUNKAR

DIPA SIRESWAL

RASHMI DEHARIYA

JYOTI THAKUR



WHAT ARE RRBs ? Regional Rural Banks are the

banking organizations being

operated in different states of

India. They have been created to

serve the rural areas with

banking and financial services

http://en.wikipedia.org/wiki/Banking

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Financial_services

http://en.wikipedia.org/wiki/Financial_services

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Banking



RURAL BANKS

The proposal for instituting a kind of ‘rural banks’ was first mooted by theBanking Commission in its Report published in 1972.

To strengthen the field of co-operative banking in the rural sector, the

commission in proposed the creation of a new category of ‘rural banks’ inone of the three possible ways:

Conversion of selected viable or potentially viable primary agriculturalsocieties (PACS) into ‘rural co-operative banks’ which would provide a fullrange of banking facilities, together with certain closely allied non-bankingservices.

Restructuring a sound primary agricultural credit society as a subsidiary ofa commercial bank. It is to be called ‘rural subsidiary bank’.

Commercial banks may also set-up their own rural subsidiary banks withlocal participation in capital and management, where suitable primarysocieties are not available.



Initially 5 RRBs were set up in 4

states in HARYANA , WEST BENGAL,

RAJASTHAN ,with one each and 2 inUTTAR PRADESH.

First RRB Prathama Grameen

Bank(UP). RRBs are working in all states

except GOA and SIKKIM



Functions of Rural Banks

According to the Banking Commission, the rural banks shouldrender the following functions:

To accept deposits

To grant advancesTo provide ancillary banking services

To supply inputs and equipments to farmers

To provide asssistance in the marketing of their products

To maintain godowns

To help in the overall development of villages in its area

To extend credit and all other banking services



The scheme of Regional

Rural BanksThe Government thought of instituting rural banks as part of its Twenty-Point Programme, also referred to as the New Economic Programme, in1975, inspired by considerations of lowering the costs of rural banking andoperating such banks with local staff in a homely atmosphere of the

villages.The Government of India then appointed a Working Group on Rural Banks,headed by Shri M. Narasimah, to examine in detail the issues involved inthe establishment of new rural banks as subsidiaries of the public sector

banks to deal with the problem of rural finance. The Working Groupsubmitted its report on July30,1975.

The Working Group, howevere, conceieved a grossly different idea fromthe concept of ‘rural banks’ advocated by the banking Commission. TheGroup recommended the establishment of state-sponsored regionally basedand rural oriented commercial banks called Regional Rural banks.



Based on the recommendation and after due consideration of the

scheme suggested by the Narasimah Committee’s Report, the

Government of India instituted Regional Rural Banks Ordinance,

1975, promulgated by the President of India on September 26,

1975.

Subsequently, on February 9, 1976, the Government of India

passed the Regional Rural Banks Act, 1976.



LIST OF RRBs • Allahabad UP Gr amin Bank • Andhra Pradesh Grameena Vikas Bank • Andhra Pragathi Gr ameena Bank • Arunachal Pradesh Rural Bank • Aryavart

Gramin

Bank

• Assam Gramin Vikash Bank •Baitarani Gramya Bank •Ballia –Etawah Gramin Bank •Bangiya Gramin Vikash Bank •Baroda Gujarat Gr amin Bank •Baroda Rajasthan Gr amin Bank •Baroda Uttar Pr adesh Gramin Bank •Bihar Kshetriya Gramin Bank

http://en.wikipedia.org/wiki/Allahabad_UP_Gramin_Bank

http://en.wikipedia.org/w/index.php?title=Andhra_Pradesh_Grameena_Vikas_Bank&action=edit&redlink=1








http://en.wikipedia.org/wiki/Andhra_Pragathi_Grameena_Bank











http://en.wikipedia.org/w/index.php?title=Arunachal_Pradesh_Rural_Bank&action=edit&redlink=1











http://en.wikipedia.org/wiki/Aryavart_Gramin_Bank











http://en.wikipedia.org/w/index.php?title=Assam_Gramin_Vikash_Bank&action=edit&redlink=1









http://en.wikipedia.org/w/index.php?title=Baitarani_Gramya_Bank&action=edit&redlink=1













http://en.wikipedia.org/w/index.php?title=Ballia_%E2%80%93Etawah_Gramin_Bank&action=edit&redlink=1



http://en.wikipedia.org/wiki/Bangiya_Gramin_Vikash_Bank









http://en.wikipedia.org/w/index.php?title=Baroda_Gujarat_Gramin_Bank&action=edit&redlink=1









http://en.wikipedia.org/w/index.php?title=Baroda_Rajasthan_Gramin_Bank&action=edit&redlink=1











http://en.wikipedia.org/w/index.php?title=Baroda_Uttar_Pradesh_Gramin_Bank&action=edit&redlink=1













http://en.wikipedia.org/w/index.php?title=Bihar_Kshetriya_Gramin_Bank&action=edit&redlink=1

















































































































The Organisation and Functions of the

Regional Rural Banks

The Regional Rural Banks (RRB) aimed at providing credit and otherfacilities to the small and marginal farmers, agricultural labourers, artisansand small entrepreneurs in rural areas.

Structure and Organisation of the RRB



Management of RRBs The working and affairs of the RRB are directed and

managed by a Board of Directors consists of

a Chairman, three directors to be nominated by the central

Government concerned, and

not more than two directors to be nominated by the

State Government concerned, and

not more than 3 directors to be nominated by the

sponsoring bank.

The chairman is appointed by the Central Governmentand his term of office does not exceed five years



Functions of the RRB

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.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-operationAccepting deposits



Operations of RRBs

In December 1989, 196 reportingRRBs have aggregate deposits of

Rs. 3,644 crores and advances of Rs.3,155 crores. Over 92 percent of thetotal advances are made by theRRBs to the weaker sections. Their

advances under IRDP during 1986amounted to Rs. 200 crores relatingto 7,84,145 accounts.



Finance from NABARD

In December 1986, the RRBs obtained

refinance amounting to Rs. 246.9 crores

from the sponsor banks. They borrowedRs. 226.9 crores of short-term loans and

Rs. 80.3 crores of medium-term loans from

the NABARD.



Working Group on RRBs

The Reserve Bank of India had

constituted a Working Group on

RRBs, under the chairmanship ofShri S. M. Kelkar, to review the

various aspects of the working of

the RRBs. The Group submitted its

Report in June 1986.

Following are the major

recommendations of the Kelkar

Group:



1) The RRBs should be permitted to increase their authorised

share capital from Rs.1 crore to Rs.5 crores and issued capitalfrom Rs.25 lakhs to Rs.1 crore.

2) The sponsor banks should, on behalf of RRBs, invest thedeposits kept by them in current account for SLR requirementin government securities.

3) The sponsor banks should lower the rate of interest onrefinance from 8.5 percent to 7 percent.

4) New RRBs should be established only in consideration of thegenuine need to serve a neglected area, especially tribal areasand people.

5) The coverage of RRBs be restricted to 2 districts in order tohave a better supervision ad control of their branches.



Rbi’s assistance With a view to facilitate RRBs operations, the

RBI gave RRBs direct access to refinanceassistance at concessional rate of 3% below

the bank rate. Allowed to maintain a lower level of SLR than

commercial banks.

Allowed to pay half percent more interest onall deposits except those of 3 years or more.

Sponsor banks IDBI, NABARD, SIDBI and otherFIs are statutorily required under the RRBsact to provide managerial and financialassistance to RRBs.



Establishment and

incorporation of RRBs

(1) The Central Government may, if requested soto do by a Sponsor Bank, by notification in theOfficial Gazette, establish in a State or Union

territory, on or more Regional Rural Banks withsuch name as may be specified in the notificationand may, by the said or subsequent notification,specify the local limits within which each RegionalRural Bank shall operate.

(2) Every Regional Rural Bank shall be a bodycorporate with perpetual succession and acommon seal with power, subject to the provisionsof this Act, to acquire, hold and dispose ofproperty and to contract and may sue and be suedin its name.



Major Problems Faced By RRBs

1) Haste and lack of Co-ordination in Branch Expansion.

2) Difficulties in Deposit Mobilization.

3) Constraints in Deposit Mobilization.

4) Slow Progress in Lending Activity.

5) Urban-Orientation of Staff.

6) Procedural Rigidities.



Thank You!

regional rural bankss

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