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Objectives :-

Objectives :-. On completion of this period, you would be able to Understand : the meaning of Regional Rural Banks (RRB) and need for RRBs. the features of RRBs. the functions of RRBs. (REGIONAL RURAL BANKS) R.R.B. Meaning The Banks started in Rural Areas.

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Objectives :-

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  1. Objectives:- On completion of this period, you would be able to Understand : • the meaning of Regional Rural Banks (RRB) and need for RRBs. • the features of RRBs. • the functions of RRBs. CCP-504 (B). 8

  2. (REGIONAL RURAL BANKS) R.R.B Meaning • The Banks started in Rural Areas. • To fill the gap in the Rural credit. • Sponsored by Commercial Banks. • Restricted to one or two Districts. CCP-504 (B). 8

  3. Regional Rural Banks Need for setting up of RRBs: • In the previous classes, you have learnt about the functions of commercial banks and agricultural banks. • Agricultural Banks mainly concentrate on rural credit. CCP-504 (B). 8

  4. Regional Rural Banks • Commercial banks also issue loans for priority sectors. • So, is there any need to set up special type of banks to develop rural areas? • The answer is ‘Yes’ CCP-504 (B). 8

  5. Regional Rural Banks • The establishment of RRB became necessary because the existing institutions would not be able to fill the gaps in the rural credit institutional system. • The Regional Rural Banks were set up in 1975 to fulfill one of the objectives of 20 point Economic Program. CCP-504 (B). 8

  6. Regional Rural Banks • Objectives of setting up of RRB are : 1.Liquidation of rural indebtedness. 2.Provision of institutional credit to farmers, rural credit, rural artisans and weaker sections. • With the setting up of RRB, multi-agency approach was adopted towards rural credit. CCP-504 (B). 8

  7. Features of Regional Rural Banks • These banks were set up on the recommendations of Narasimham committee. • Regional Rural Banks are the subsidiaries of public sector banks. • These banks are scheduled commercial banks supported by government but sponsored by commercial banks. CCP-504 (B). 8

  8. Features of Regional Rural Banks • Share capital was subscribed by Central Government, State Government and sponsoring bank. • Share capital subscribed by Central Government-50%, State Government-35% and sponsoring bank-15%. • All types of assistance is given by sponsoring bank during first 5 years. CCP-504 (B). 8

  9. Features of Regional Rural Banks • The area of operation of a rural bank is limited to one or two districts. • The rate of interest charged by them shall not be higher than the prevailing rates of co-operative societies. • These banks get refinance facilities from NABARD • These banks also maintain cash reserves of 3% of the total liabilities. CCP-504 (B). 8

  10. Features of Regional Rural Banks • Visakha Grameena Bank, Godavari Grameena Bank are examples for RRB. • These interests of the depositors are protected by the deposit insurance and credit guarantee corporation. CCP-504 (B). 8

  11. Functions of Regional Rural Banks. RRB perform the following functions. • They provide credit facilities to agricultural sector. • These bank also collect deposits from the public. • Emphasis is given to small and marginal farmers and agricultural labourers. CCP-504 (B). 8

  12. Functions of Regional Rural Banks. • They provide subsidiary services like Commercial Banks. • They promote all round development of the villages. • They also help small business units and self-employment schemes. CCP-504 (B). 8

  13. Summary • There is need for setting up of RRB to fill the credit gap rural areas. • With the starting of RRB, multi-agency approach was adopted to develop the rural areas. • RRB are subsidiaries to public sector Banks. • Share capital is contributed by Central Government, State Government and Sponsoring Bank. CCP-504 (B). 8

  14. Summary • They provide rural credit. • Emphasis is given to small and marginal farmers and agricultural labourers. • These banks perform all the functions of Commercial Banks. CCP-504 (B). 8

  15. Quiz • Regional Rural Banks were set up on the recommendations of which committee? A. Narasimham B. Rangarajan C. Raman D. None CCP-504 (B). 8

  16. Quiz • The RRB get refinance facilities from A. RBI B. NABARD C. Central Government D. State Government CCP-504 (B). 8

  17. Quiz 3. RRBs concentrate on A. Rural Credit B. Urban Credit C. Housing Loans D. None CCP-504 (B). 8

  18. Frequently Asked Questions • What are the features of Regional Rural Banks? • What are the functions of Regional Rural Banks? • Explain the need for Regional Rural Banks and their functions? CCP-504 (B). 8

  19. Assignment: • Visit a Grameena Bank of your area and know which bank has sponsored that bank? • Know the activities of that bank. • Know the various types of deposits and loans offered by that bank. CCP-504 (B). 8

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