Regional rural banks

REGIONAL RURAL BANKS

The Regional Rural Banks (RRBs) aimed at providing credit and other facilities to the small and marginal farmers, agricultural labourers, artisans and small entrepreneurs in rural areas. The RRB Act, 1986, empowers the Central Government to establish in a State or Union Territory one or more RRBs when any sponsor bank makes such a request The sponsor bank assists the RRB in many ways by subscribing to its share capital, by helping in its establishment, by assisting in recruitment and training of its cadre, and in general providing such managerial and financial assistance sought by the RRB. The RRB functions within the local limits as specified by government notification. It can have its branches at any place as notified by the government.

The functions of the RRB are as follows:

(1) Granting of loans and advances to small and marginal farmers and agricultural labourers, whether individually or in groups, and to co-operative societies, agricultural processing societies, co-operative farming societies, primarily for agricultural purposes or for agricultural operations and other related purposes;

(2) Granting of loans and advances to artisans, small entrepreneurs and persons of small means engaged in trade, commerce and industry or other productive activities within its area of co-operation; and

(3) Accepting deposits.

(4)  RRBs provides banking services at the doorsteps of the rural people ,particularly in those area which are not served by any commercial Bank

(5) The RRBs charges a lower rate of Interest and thus they reduce the cost of credit in the rural areas.

(6) RRBs provide loan and other financial assistance to entrepreneurs in villages, sub-urban areas and small towns .So that they become able to enlarge their business.

(7) Encourage the saving habit among the rural and semi-urban population.