Origin and Performance of Regional Rural Bank of India
Origin and Performance of Regional Rural Bank of India
Origin and Performance of Regional Rural Bank of India
A Project Report
Mr.Devang Mehta
Submitted by:
Hetvi Tank
Std: Sy,BBA(sem3)
Roll no.: 11
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INDEX
SR.No Particulars Page
no.
1 Introduction of RRB 03
2 Origin of RRB 05
3 Development of RRB 07
4 Performance of RRB 08
5 Conclusion 12
6 References 12
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Rural banking institutions are playing a very important role for all-
round development of rural areas of the country. In order to support the rural
banking sector in recent years, Regional Rural Banks have been set up all over the
country with the objective of meeting the credit needs of the most under privileged
sections of the society.
These Regional Rural Banks (RRBs) have been receiving a high degree
of importance and attention in the rural credit system.
All these five RRBs have an authorised capital of Rs 1crore and paid-
up capital of Rs 25 lakh. The share capital of RRB is subscribed in the following
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manner as the Central Government 50%, the State Government concerned 15% and
the sponsoring commercial bank 35%.
The regional rural banks are maintaining its special charter it their of
operation is very much limited to a definite region, grant direct loan to rural people
at concessional rates and receive subsidies and concessions from the Reserve Bank
and the sponsoring bank.
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With a view to develop the rural economy by catering the basic banking
needs for the purpose of development of Agriculture, Trade, Commerce, Industry
and other productive activities in the rural areas, credit and other facilities,
particularly to the small and marginal farmers, Agricultural Labourers, Artisans and
small entrepreneurs and for matters connected therewith and individuals thereto.
RRBs have now become an Integral part of the Indian banking System.
Like other public sector Banks RRBs are established by Govt. of. India and are
scheduled & notified by Reserve Bank of India.
marketing efforts etc. The amalgamated RRBs also benefit from larger area of
operation, enhanced credit exposure limits for high value and diverse banking
activities. As a result of amalgamation, number of the RRBs has been reduced from
196 to 64 as on 31 March 2013. The number of branches of RRBs increased to
17856 as on 31 March 2013 covering 635 districts throughout the country.
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Sources of fund: The sources of funds of RRBs comprise of owned fund, deposits,
borrowings from NABARD, Sponsor Banks and other sources including SIDBI and
National Housing Bank.
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Owned Funds:
Deposits:
Borrowings:
Uses of Fund
Investment:
Loans Issued:
Total loans issued by RRBs during the year increased to 102162 crore
from 82538 crore during the previous year registering a growth of 23.78%.
Working Results
Profitability:
63 RRBs (out of 64 RRBs) have earned profit (before tax) to the extent
of 3281 crore during the year 2012-2013. The profit was higher than the previous
year. After payment of Income Tax of 896 crore, the net profit aggregated to 2385
crore. One RRB viz. Nagaland Rural Bank incurred loss to the tune of 2.07 crore.
Accumulated Losses:
Recovery Report:
The aggregate CDR of RRBs increased over the years from 41.83% as
on 31 March 2002 to 66.13% as on 31 March 2013. Nine of the RRBs reported CDR
of more than 100%.
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Financial Inclusion:
Conclusion:
For the purpose of rural development and meeting the credit needs
of rural people, RRB came into existence on the basis of the recommendation of
Narashimhan committee. The regional rural banks have been highly successful in the
mobilising rural savings. RRBs are providing loans to small and marginal farmers,
artisans, self-employed persons etc. RRBs recruit local persons which creates the
employment at the door steps of the rural peoples. Out of 56 RRBs 49 RRBS earning
profits. To improve the functioning of RRBs Union cabinet approved extension of
scheme of recapitalization of RRBs up to 2019-20. This will enable RRBs to
maintain minimum prescribed capital to risk weighted asset ratio (CRAR) of 9%. It
will help RRBs in ensuring strong capital structure and minimum required level of
CRAR. It will also helps in financial stability of RRBs and helps it to plays greater
role in financial inclusion and meeting the credit requirements of rural area.
References:
https://madhavuniversity.edu.in/rrb-of-india.html
https://financialservices.gov.in/banking-divisions/Regional-Rural-Bank
https://karnatakagraminbank.com/organisational-information/origin
http://wwjmrd.com/archive/2016/7/107/performance-evaluation-of-regional-rural-
banks-in-india
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