Regional Rural Banks of India: Important Functions of RRBs in India

Regional Rural Banks or RRBs are government banks operating at regional level in different states of India. These are designed to cater the needs of the rural area people. Regional Rural Banks commercial banks which helps to bring the financial inclusion in the primary level of the nation. Currently there are 43 RRBs in India and each RRB is sponsored by Government of India along with State Government and Sponsor bank. But why do we need them specifically for the rural areas? and How they are helping in building the economy of our nation? We will read all the important points related to this in this article. Make sure you real it well to grasp it as it will be very beneficial for you in RRB PO interview and main examination as well.

How Regional Rural Bank came into existence?

Regional Rural Banks (RRBs) were set up under the provisions of 26 September 1975 ordinance and the RRB Act of 1976 to allocate banking and credit services for agriculture and other rural sectors. They were established on the recommendation of Narshimham Working Group. That time, almost 70% of India’s population was based on rural region.

After the legislation of the Regional Rural Banks Act, 1976, the first Regional Rural Bank “Prathama Grameen Bank” at Moradabad (U.P) was set up on October 2, 1975 which was sponsored by Syndidcate Bank with Rs 5 crore as initial capital. There were 4 more RRBs that were established after this on the same day. One among them was set up at Malda (West Bengal) under the name of Gour Grameen Bank which was the first Grameen Bank of Eastern India.

Presently, there are total 45 RRBs in India.

Ownership of Regional Rural Banks

Regional Rural Banks are owned by three entities:

• Central Government with a share of 50%
• State Government with a share of 15% and
• Sponsor Bank with a share of 35% (Any commercial bank can sponsor the regional rural banks)

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Regional Rural Banks Objective

RRBs were created with the following objective in mind:

• To provide banking services to rural and semi-urban areas.
• Locker, debit and credit card facilities to the country side people.
• To enhance employment opportunities by promoting trade and commenrce in rural areas.
• To support enterpreneurship in rural areas.
• Pension and MGNREGA wages distribution

Organisational Structure of Regional Rural Banks

The structure of RRBs differs from one RRB to the other RRB depanding on the size and nature of the RRB. The following is the hierarchy of officials in a Regional Rural Bank.

• Board of Directors
• Chairman & Managing Director
• General Manager
• Assistant General Manager
• Regional Manager/Chief Manager
• Senior Manager
• Manager
• Officer
• Office Assistant
• Office Attendant

Number of Regional Rural Banks in India

Currently, Regional Rural Bank are going through a process of amalgamation and consolidation. We have a list of number of RRBs

Number of RRBs from the initial date

Dec 1975:- 6 RRBs

Dec 1980:- 85 RRBs

Dec 1985:- 188 RRBs

Mar 1990:- 196 RRBs

Mar 2006:- 133 RRBs

Mar 2011:- 82 RRBs

Mar 2013:- 64 RRBs

Mar 2014:- 57 RRBs

Mar 2016:- 56 RRBs

Jan 2019:- 45 RRBs

April 2020:- 43 RRBs

Regional Rural Bank Regulation

Regional Rural Banks are regulated by RBI and supervised by National Bank for Agriculture and Rural Development (NABARD). All the states have RRBs in India now except Sikkim and Goa.

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Frequently Asked Questions: Regional Rural Banks

Q. How many Regional Rural Banks are there?

Ans. Currently there are 43 RRBs in India.

Q. Who is the parents organization of these Regional Rural Banks?

Ans. NABARD is the parent organization of these Regional Rural Banks.

Q. Is Regional Rural Banks a govt bank?

Ans. Yes! RRBs are Indian Scheduled Commercial Banks ( Government Banks)

Q. What is ratio of sponsorship in a RRB?

Ans. The ratio of sponsorship in a RRB is Government 50%, State Government 15% and sponsor bank 35%.

Q. On whose recommendation RRBs were set up?

Ans. RRBs were set up on the recommendations of The Narshimham committee Working Group.