hl rrb 001
TRANSCRIPT
CCP-504 (B). 8 CCP-504 (B). 8 11
ObjectivesObjectives:-:-
On completion of this period, you On completion of this period, you
would be able to Understand : would be able to Understand : the meaning of Regional Rural the meaning of Regional Rural
Banks (RRB) and need for RRBs.Banks (RRB) and need for RRBs.
the features of RRBs.the features of RRBs.
the functions of RRBs.the functions of RRBs.
CCP-504 (B). 8 CCP-504 (B). 8 22
(REGIONAL RURAL BANKS) R.R.B(REGIONAL RURAL BANKS) R.R.B
Meaning Meaning The Banks started in Rural Areas.The Banks started in Rural Areas.
To fill the gap in the Rural credit.To fill the gap in the Rural credit.
Sponsored by Commercial Banks.Sponsored by Commercial Banks.
Restricted to one or two Districts.Restricted to one or two Districts.
CCP-504 (B). 8 CCP-504 (B). 8 33
Regional Rural Regional Rural BanksBanks
Need for setting up of RRBsNeed for setting up of RRBs::
In the previous classes, you have learnt In the previous classes, you have learnt
about the functions of commercial banks about the functions of commercial banks
and agricultural banks.and agricultural banks.
Agricultural Banks mainly concentrate on Agricultural Banks mainly concentrate on
rural credit.rural credit.
CCP-504 (B). 8 CCP-504 (B). 8 44
Commercial banks also issue Commercial banks also issue
loans for priority sectors.loans for priority sectors.
So, is there any need to set up So, is there any need to set up
special type of banks to develop special type of banks to develop
rural areas?rural areas?
The answer is ‘Yes’The answer is ‘Yes’
Regional Rural BanksRegional Rural Banks
CCP-504 (B). 8 CCP-504 (B). 8 55
The establishment of RRB became The establishment of RRB became
necessary because the existing institutions necessary because the existing institutions
would not be able to fill the gaps in the would not be able to fill the gaps in the
rural credit institutional system.rural credit institutional system.
The Regional Rural Banks were set up in The Regional Rural Banks were set up in
1975 to fulfill one of the objectives of 20 1975 to fulfill one of the objectives of 20
point Economic Program.point Economic Program.
Regional Rural BanksRegional Rural Banks
CCP-504 (B). 8 CCP-504 (B). 8 66
Objectives of setting up of RRB are :Objectives of setting up of RRB are :
1.Liquidation of rural indebtedness.1.Liquidation of rural indebtedness.
2.Provision of institutional credit to 2.Provision of institutional credit to
farmers, rural credit, rural artisans and farmers, rural credit, rural artisans and
weaker sections.weaker sections.
With the setting up of RRB, multi-agency With the setting up of RRB, multi-agency
approach was adopted towards rural approach was adopted towards rural
credit.credit.
Regional Rural BanksRegional Rural Banks
CCP-504 (B). 8 CCP-504 (B). 8 77
Features of Regional Rural BanksFeatures of Regional Rural Banks
These banks were set up on the These banks were set up on the
recommendations of Narasimham recommendations of Narasimham
committee.committee.
Regional Rural Banks are the subsidiaries Regional Rural Banks are the subsidiaries
of public sector banks.of public sector banks.
These banks are scheduled commercial These banks are scheduled commercial
banks supported by government but banks supported by government but
sponsored by commercial banks.sponsored by commercial banks.
CCP-504 (B). 8 CCP-504 (B). 8 88
Share capital was subscribed by Central Share capital was subscribed by Central
Government, State Government and Government, State Government and
sponsoring bank.sponsoring bank.
Share capital subscribed by Central Share capital subscribed by Central
Government-50%, State Government-Government-50%, State Government-
35% and sponsoring bank-15%.35% and sponsoring bank-15%.
All types of assistance is given by All types of assistance is given by
sponsoring bank during first 5 years.sponsoring bank during first 5 years.
Features of Regional Rural Features of Regional Rural BanksBanks
CCP-504 (B). 8 CCP-504 (B). 8 99
The area of operation of a rural bank is limited The area of operation of a rural bank is limited
to one or two districts.to one or two districts.
The rate of interest charged by them shall not The rate of interest charged by them shall not
be higher than the prevailing rates of co-be higher than the prevailing rates of co-
operative societies.operative societies.
These banks get refinance facilities from These banks get refinance facilities from
NABARDNABARD
These banks also maintain cash reserves of 3% These banks also maintain cash reserves of 3%
of the total liabilities.of the total liabilities.
Features of Regional Rural Features of Regional Rural BanksBanks
CCP-504 (B). 8 CCP-504 (B). 8 1010
Visakha Grameena Bank, Godavari Visakha Grameena Bank, Godavari
Grameena Bank are examples for RRB.Grameena Bank are examples for RRB.
These interests of the depositors are These interests of the depositors are
protected by the deposit insurance and protected by the deposit insurance and
credit guarantee corporation.credit guarantee corporation.
Features of Regional Rural Features of Regional Rural BanksBanks
CCP-504 (B). 8 CCP-504 (B). 8 1111
Functions of Regional Rural Banks.Functions of Regional Rural Banks.
RRB perform the following functions.RRB perform the following functions. They provide credit facilities to agricultural They provide credit facilities to agricultural
sector.sector.
These bank also collect deposits from the These bank also collect deposits from the
public.public.
Emphasis is given to small and marginal Emphasis is given to small and marginal
farmers and agricultural labourers.farmers and agricultural labourers.
CCP-504 (B). 8 CCP-504 (B). 8 1212
They provide subsidiary services like They provide subsidiary services like
Commercial Banks.Commercial Banks.
They promote all round development of They promote all round development of
the villages.the villages.
They also help small business units and They also help small business units and
self-employment schemes.self-employment schemes.
Functions of Regional Rural Functions of Regional Rural Banks.Banks.
CCP-504 (B). 8 CCP-504 (B). 8 1313
SummarySummary
There is need for setting up of RRB to fill the There is need for setting up of RRB to fill the
credit gap rural areas.credit gap rural areas.
With the starting of RRB, multi-agency approach With the starting of RRB, multi-agency approach
was adopted to develop the rural areas.was adopted to develop the rural areas.
RRB are subsidiaries to public sector Banks.RRB are subsidiaries to public sector Banks.
Share capital is contributed by Central Share capital is contributed by Central
Government, State Government and Sponsoring Government, State Government and Sponsoring
Bank.Bank.
CCP-504 (B). 8 CCP-504 (B). 8 1414
They provide rural credit.They provide rural credit.
Emphasis is given to small and marginal Emphasis is given to small and marginal
farmers and agricultural labourers.farmers and agricultural labourers.
These banks perform all the functions of These banks perform all the functions of
Commercial Banks.Commercial Banks.
SummarySummary
CCP-504 (B). 8 CCP-504 (B). 8 1515
QuizQuiz
1.1. Regional Rural Banks were set up Regional Rural Banks were set up on the recommendations of which on the recommendations of which committee?committee?
A. NarasimhamA. Narasimham
B. RangarajanB. Rangarajan
C. RamanC. Raman
D. NoneD. None
CCP-504 (B). 8 CCP-504 (B). 8 1616
2.2. The RRB get refinance facilities The RRB get refinance facilities fromfrom
A. RBI A. RBI
B. NABARDB. NABARD
C. Central GovernmentC. Central Government
D. State GovernmentD. State Government
QuizQuiz
CCP-504 (B). 8 CCP-504 (B). 8 1717
3. RRBs concentrate on 3. RRBs concentrate on
AA. . Rural CreditRural Credit
B. Urban CreditB. Urban Credit
C. Housing LoansC. Housing Loans
D. NoneD. None
QuizQuiz
CCP-504 (B). 8 CCP-504 (B). 8 1818
Frequently Asked QuestionsFrequently Asked Questions
What are the features of Regional Rural What are the features of Regional Rural
Banks?Banks?
What are the functions of Regional What are the functions of Regional
Rural Banks?Rural Banks?
Explain the need for Regional Rural Explain the need for Regional Rural
Banks and their functions?Banks and their functions?
CCP-504 (B). 8 CCP-504 (B). 8 1919
Assignment:Assignment:
1.1. Visit a Grameena Bank of your area Visit a Grameena Bank of your area
and know which bank has sponsored and know which bank has sponsored
that bank?that bank?
2.2. Know the activities of that bank.Know the activities of that bank.
3.3. Know the various types of deposits and Know the various types of deposits and
loans offered by that bank.loans offered by that bank.