Regional rural banks incur net loss of Rs 2,206 crore in FY20

• 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

Subscribe to Get Weekly updates

Get daily current affair video, detailed current affairs PPT for quick revision and Free One Liner PDF directly in your inbox. Subscribe now to get this month's one liner for FREE.