Regional Rural Bank

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Regional Rural Banks are local level banking organizations operating in different States of India. They have been created with a view to serve primarily the rural areas of India with basic banking and financial services. However, RRB's may have branches set up for urban operations and their area of operation may include urban areas too.


In this bank located in railway road,virudhunagar.The main purpose of RRB's is to mobilize financial resources from rural / semi-urban areas and grant loans and advances mostly to small and marginal farmers, agricultural laborers and rural artisans.  

The area of operation of RRBs is limited to the area as notified by Government of India covering one or more districts in the State. RRB's also perform a variety of different functions. RRB's perform various functions in following heads • Providing banking facilities to rural and semi-urban areas. Carrying out government operations like disbursement of wages of MGNREGA workers, distribution of pensions etc. • Providing Para-Banking facilities like locker facilities, debit and credit cards.


Regional Rural Banks were established under the provisions of an Ordinance passed on 26 September 1975 and the RRB Act. 1976 to provide sufficient banking and credit facility for agriculture and other rural sectors. These were set up on the recommendations of The Narasimham Working Group[1] during the tenure of Indira Gandhi's government with a view to include rural areas into economic mainstream since that time about 70% of the Indian Population was of Rural Orientation. The development process of RRBs started on 2 October 1975 with the forming of the first RRB, the Prathama Bank. Also on 2 October 1976 five regional rural banks were set up with a total authorised capital of Rs. 100 crore ($10 Million) which later augmented to 500 crore ($50 Million). The Regional Rural Bank were owned by the Central Government ,the State Government and the Sponsor Bank(There were five commercial banks, Punjab National Bank, State Bank of India, Syndicate Bank, United Bank of India and United Commercial Bank, which sponsored the regional rural banks) who held shares in the ratios as follows Central Government-50%, State Government- 15% and Sponsor Banks- 35%.. Earlier, Reserve Bank of India had laid down ceilings on the rate of interest to be charged by these RRBs. However from August 1996 the RRBs have been granted freedom to fix rates of interest, which is usually in the range of 14-18% for advances.

Recapitalization of Regional Rural Banks (RRBs)[edit]

Subsequent to review of the financial status of RRBs by the Union Finance Minister in August, 2009, it was felt that a large number of RRBs had a low Capital to Risk weighted Assets Ratio (CRAR). A committee was therefore constituted in September, 2009 under the Chairmanship of K C Chakrabarty, Deputy Governor, RBI to analyse the financials of the RRBs and to suggest measures including re-capitalisation to bring the CRAR of RRBs to at least 9% in a sustainable manner by 2012. The Committee submitted its report in May, 2010. The following points were recommended by the committee:

  • RRBs to have CRAR of at least 7% as on 31 March 2011 and at least 9% from 31 March 2012 onwards. recapitalisation requirement of Rs. 2,200.00 crore for 40 of the 82 RRBs. This amount is to be released in’ two installments in 2010-11 and 2011-12. .
  • The remaining 42 RRBs will not require any capital and will be able to maintain CRAR of at least 9% ifs on 31 st March 2012 and thereafter on their own.
  • A fund of Rs. 100 crore to be set up for training and capacity building of the RRB staff.

The Government of India recently approved the recapitalization of Regional Rural Banks (RRBs) to improve their Capital to Risk Weighted Assets Ratio CRAR) in the following manner:

  • Share of Central Government i.e. Rs.1, 100 crore will be released as per provisions made by the Department of Expenditure in 2010-11 and 2011-12. However, release of Government of India share will be contingent on proportionate release of State Government and Sponsor Bank share.
  • A capacity building fund with a corpus of Rs.100 crore to be set up by Central Government with NABARD for training and capacity building of the RRB staff in the institution of NABARD and other reputed institutions. The functioning of the Fund will be periodically reviewed by the Central Government. An Action Plan will be prepared by NABARD in this regard and sent to Government for approval.
  • Additional amount of Rs. 700 crore as contingency fund to meet the requirement of the weak RRBs, particularly those in the North Eastern. and Eastern Region, the necessary provision will be made in the Budget as and when the need arises.

Organizational Structure[edit]

The Organizational Structure for RRB's varies from branch to branch and depends upon the nature and size of business done by the branch. The Head Office of an RRB normally had three to seven departments.

The following is the decision making hierarchy of officials in a Regional Rural Bank.

  • Board of Directors
  • Chairman & Managing Director
  • General Manager
  • Chief Manager/Regional Managers
  • Senior Manager
  • Manager
  • Officer / Assistant Manager
  • Office Assistant (Multipurpose)


Currently, RRB's are going through a process of amalgamation and consolidation. 25 RRBs have been amalgamated in January 2013 into 10 RRBs. This counts 67 RRBs till 1st week of June 2013. On 31 March 2006, there were 133 RRBs (post-merger) covering 525 districts with a network of 14,494 branches. All RRBs were originally conceived as low cost institutions having a rural ethos, local feel and pro poor focus. However, within a very short time, most banks were making losses. The original assumptions as to the low cost nature of these institutions were belied. This may be again amalgamated in near future. At present there are 56 RRBs in India.

Legal Existence and Protection[edit]

RRB's are recognized by the law and they have legal significance.The Regional Rural Banks Act, 1976 Act No. 21 Of 1976 [9 February 1976.] reads

"For the incorporation, regulation and winding up of Regional Rural Banks with a view to developing the rural economy by providing, for the purpose of development of agriculture, trade, commerce, industry and other productive activities in the rural areas, credit and other facilities, particularly to the small and marginal farmers, agricultural laborers, artisans and small entrepreneurs, and for matters connected therewith and incidental thereto".

List of Regional Rural banks[2]

  1. Allahabad UP Gramin Bank
  2. Andhra Pradesh Grameena Vikas Bank
  3. Andhra Pragathi Grameena Bank
  4. Arunachal Pradesh Rural Bank
  5. Gramin Bank of Aryavart
  6. Assam Gramin Vikash Bank
  7. Baitarani Gramya Bank
  8. Bangiya Gramin Vikash Bank
  9. Baroda Gujarat Gramin Bank
  10. Baroda Rajasthan Kshetriya Gramin Bank
  11. Baroda Uttar Pradesh Gramin Bank
  12. Bihar Gramin Bank is the result of the merger on 15 Oct 2012 between Samastipur Kshetriya Gramina Bank and Bihar Kshetriya Gramina Bank.
  13. Chaitanya Godavari Grameena Bank
  14. Chhattisgarh Gramin Bank
  15. Deccan Grameena Bank
  16. Dena Gujarat Gramin Bank
  17. Durg-Rajnandgaon Gramin Bank
  18. Ellaquai Dehati Bank
  19. Sarva Haryana Gramin Bank
  20. Himachal Gramin
  21. Jhabua Dhar Kshetriya Gramin Bank
  22. Jharkhand Gramin Bank
  23. JK Gramin Bank
  24. Kalinga Gramya Bank
  25. Karnataka Vikas Grameena Bank
  26. Kashi Gomti Samyut Gramin Bank
  27. Kaveri Grameena Bank
  28. Kerala Gramin Bank
  29. Krishna Grameena Bank - Amalgamated with PGB on 23 Aug 13 - New name: Pragathi Krishna Gramin Bank
  30. Langpi Dehangi Rural Bank
  31. Madhumalti Building Gupte Marg
  32. Madhya Bihar Gramin Bank
  33. Mahakaushal Kshetriya Gramin Bank
  34. Maharashtra Gramin Bank
  35. Malwa Gramin Bank
  36. Manipur Rural Bank
  37. Marudhara Gramin Bank
  38. Meghalaya Rural Bank
  39. Mewar Anchalik Gramin Bank
  40. Mizoram Rural Bank
  41. Nagaland Rural Bank
  42. Narmada Jhabwa Gramin Bank
  43. Neelachal Gramya Bank
  44. Pallavan Grama Bank
  45. Pandyan Grama Bank
  46. Parvatiya Gramin Bank
  47. Paschim Banga Gramin Bank
  48. Pragathi Gramin Bank; after amalgamation on 23 August 2013 the bank became Pragathi Krishna Gramin Bank
  49. Prathama Bank
  50. Puduvai Bharathiar Grama Bank
  51. Punjab Gramin Bank
  52. Purvanchal Bank merged with Ballia Etawa Gramin Bank on 1 July 2013.
  53. Rushikulya Gramya Bank
  54. Saptagiri Grameena Bank
  55. Sarva Haryana Gramin Bank
  56. Sarva UP Gramin Bank
  57. Satpura Narmada Kshetriya
  58. Saurashtra Gramin Bank
  59. Mandhyanchal Grameen Bank
  60. Surguja Kshetriya Gramin Bank
  61. Sutlej Kshetriya Gramin Bank
  62. Tripura Gramin Bank
  63. Utkal Grameen Bank
  64. Uttar Banga Kshetriya Gramin Bank
  65. Uttar Bihar Gramin Bank
  66. Uttarakhand Gramin Bank
  67. Vananchal Gramin Bank
  68. Vidharbha Kshetriya Gramin Bank
  69. Wainganga Krishna Gramin Bank
  70. Odisha Gramya Bank