Regional Rural Banks (RRBs)
One of the important points of the 20 points economic programme of
Mrs. Indira Gandhi during emergency was the liquidation of rural indebtedness
by stages and provide institutional credit to farmers and artisans in rural
areas. It was in pursuance of this aspect of the New Economic programme that
the Government of India setup Regional Rural Banks (RRBs) on 1975. The share
capital of RRB is subscribed by the Central Government (50%), the State
Government concerned (15%), and the sponsoring commercial bank (35%).
The main objective of the RRBs is to provide credit and other
facilities particularly to the small and marginal farmers, agricultural
labourers, artisans and small entrepreneurs so as to develop agriculture,
trade, commerce, industry and other productive activities in the rural areas.
From the beginning, the sponsor banks have continued to provide
managerial and financial assistance to RRBs and also other concessions such as
lower rate of interest (8.5 per cent) on the latter’s borrowings from sponsor
banks. Further, the cost of staff deputed to RRBs and training expenses of RRB
staff are borne by the sponsor banks.
The RBI has been granting many concessions to RRBs:
(a) They are allowed to maintain cash reserve ratio at 3 per cent
and statutory liquidity ratio at 25 per cent; and
(b) They also provide refinance facilities through NABARD.
Related Topics
Privacy Policy, Terms and Conditions, DMCA Policy and Compliant
Copyright © 2018-2023 BrainKart.com; All Rights Reserved. Developed by Therithal info, Chennai.