• Data was recently published by National Bank for Agriculture and Rural Development (NABARD). As on March 31, 2020, there were 45 RRBs functioning in 685 districts of 26 states and 3 UTs.
• RRBs were set up as state-sponsored, regionally based and rural oriented institutions under the Regional Rural Banks Act, 1976. RRBs are regulated by Reserve Bank of India and are supervised by NABARD.
• RRBs are jointly owned by the Centre, the state government concerned and sponsor banks with the issued capital shared in the proportion of 50%, 15% and 35%, respectively.
The mandate of RRBs is to:
• Serve the credit needs of the small and marginal farmers, agricultural labourers, socio-economically weaker section of population for development of agriculture, trade, commerce, industry and other productive activities.
• Reduce regional imbalances and increase rural employment generation activities.
• Develop such measures which could restrict the outflow of rural deposits to urban areas.
Issues faced by RRBs:
• To inadequate finance,
• High overdues and poor loan recovery,
• To lack of technology, procedural rigidities etc.
Mains Paper 3: Economy
Prelims level: Regional rural banks
Mains level: Mandate and issues faced by RRBs