Regional rural bank

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Regional Rural Banks (RRBs)
Company type Government owned Banks
Industry Banking, financial services
Founded2 October 1975;48 years ago (1975-10-02)
Number of locations
21871 [ citation needed ]
Products Retail banking, corporate banking, investment banking, mortgage loans, wealth management, debit cards, UPI, internet banking, mobile banking, finance and insurance
Owner Government of India (50%),
Nationalised Banks (35%),
State Governments (15%)
Parent Ministry of Finance, Government of India

Regional Rural Banks (RRBs) are government owned scheduled commercial banks of India that operate at regional level in different states of India. These banks are under the ownership of Ministry of Finance, Government of India, Sponsered Bank and concerned State Government in the ratio of 50:35:15 respectively. They were created to serve rural areas with basic banking and financial services. However, RRBs also have urban branches.

Contents

The area of operation is limited to the area notified by the government of India covering, and it covers one or more districts in the State. RRBs perform various functions such as providing banking facilities to rural and semi-urban areas, carrying out government operations like disbursement of wages of MGNREGA workers and distribution of pensions, providing para-banking facilities like locker facilities, debit and credit cards, mobile banking, internet banking, and UPI services. [1]

History

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. As a result, five RRBs were set up on 2 October 1975 on the recommendations of the Narsimhan Committee on Rural Credit, during the tenure of Indira Gandhi's government. The purpose was to include rural areas into the economic mainstream since around 70% of the Indian population was rural.

Prathama Bank, with head office in Moradabad, Uttar Pradesh was the first RRB. It was sponsored by Syndicate Bank and had an authorized capital of Rs. 5 crore. [2] The other four RRBs were Gaur Gramin Bank (sponsored by UCO Bank), Gorakhpur Kshetriya Gramin Bank (sponsored by State Bank of India), Haryana Kshetriya Gramin Bank (sponsored by Punjab National Bank), and Jaipur-Nagaur Anchalik Gramin Bank (sponsored by UCO Bank).

The RRBs were owned by the central government, state government, and the sponsoring bank with 50%, 15%, and 35% shareholding respectively. [3]

Recapitalization

A review of the RRBs in August 2009 by the Union Finance Minister revealed that a large number of RRBs had a low Capital to Risk weighted Assets Ratio (CRAR). A committee was constituted in September 2009 under the chairmanship of K C Chakrabarty, [4] the deputy governor of the Reserve Bank of India (RBI) to analyse the financials of the RRBs and 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. [5] [6]

The committee recommended RRBs to have a CRAR of at least 7% on 31 March 2011 and at least 9% from 31 March 2012 onwards. The recapitalization requirement of Rs 2,200.00 crore for 40 of the 82 RRBs were 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% as of 31 March 2012 and thereafter, on their own. A fund of ₹100 crore to be set up for training and capacity building of the RRB staff. [5]

The Government of India approved the recapitalization of the RRBs to improve their CRAR in the following manner:

Organizational structure

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 nine departments. The following is the decision making hierarchy of officials in a RRB.

Amalgamation

RRBs periodically go through a process of amalgamation. In January 2013, 25 RRBs were amalgamated into 10 RRBs, totaling 67 RRBs. [7] In March 2016, there were 56 RRBs, covering 525 districts with a network of 14,494 branches. [8] As of 1 April 2020, there are 43 RRBs in India. [9]

RRBs 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: [10]

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

There are 43 RRBs since 1 April 2020. [11]

Andhra Pradesh

Arunachal Pradesh

Assam

Bihar

Chhattisgarh

Gujarat

Haryana

Himachal Pradesh

Jammu and Kashmir

Jharkhand

Karnataka

Kerala

Madhya Pradesh

Maharashtra

Manipur

Meghalaya

Mizoram

Nagaland

Odisha

Puducherry

Punjab

Rajasthan

Tamil Nadu

Telangana

Tripura

Uttar Pradesh

Uttarakhand

West Bengal

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<span class="mw-page-title-main">North Malabar Gramin Bank</span>

North Malabar Gramin Bank was a Regional Rural Bank in Kerala, India. It was established in 1976 as a Scheduled Commercial Bank as per the Regional Rural Banks Act of 1976 to provide banking facilities in the North Malabar region. It operated in seven districts of Kerala with the headquarters at Kannur, and had 222 branches as of 14 June 2013. The bank distinguished itself as one of the few profit making RRBs in India before its amalgamation.

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<span class="mw-page-title-main">Prathama UP Gramin Bank</span> Regional Rural Bank founded in 2019

Prathama UP Gramin Bank was created on 1 April 2019 by the amalgamation of two regional rural banks in Uttar Pradesh:

<span class="mw-page-title-main">Gramin Bank of Aryavart</span> Regional Rural Bank in Uttar Pradesh, India

The Aryavart Bank (AB) is an Indian Regional Rural Bank (RRB) in Uttar Pradesh established on 1 April 2019. The bank was formed by the amalgamation of Gramin Bank of Aryavart and Allahabad UP Gramin Bank. It currently has 1365 branches and 22 regional offices in rural areas of Uttar Pradesh.

Public Sector Undertakings (Banks) are a major type of government-owned banks in India, where a majority stake (i.e., more than 50%) is held by the Ministry of Finance (India) of the Government of India or State Ministry of Finance of various State Governments of India. The shares of these government-owned-banks are listed on stock exchanges. Their main objective is social welfare.

Jharkhand Rajya Gramin Bank (JRGB) is a Regional Rural Bank (RRB). The bank was established on 1 April 2019 with the amalgamation of the erstwhile Vananchal Gramin Bank and erstwhile Jharkhand Gramin Bank under the provisions of RRB Act 1976. It is under the ownership of Ministry of Finance, Government of India. This bank is sponsored by State Bank of India & is jointly Owned by the Government of India, Government of Jharkhand and State Bank of India.

<span class="mw-page-title-main">Andhra Pragathi Grameena Bank</span>

Andhra Pragathi Grameena Bank is a Regional Rural Bank in India. It was established in 2006 as a Scheduled Commercial Bank as per Regional Rural Banks Act of 1976 to provide banking facilities in Ananthapuram, Sri Sathya Sai, Annamayya, Kadapa, Kurnool, Nandyal, Tirupati, Nellore, Bapatla and Prakasam districts of Andhra Pradesh. It is under the ownership of Ministry of Finance, Government of India

Paschim Banga Gramin Bank is a premier regional rural bank in India. It is under the ownership of Ministry of Finance, Government of India. It was established on 26 February 2007 in exercise of the powers conferred by Sub-section (1) of Section 23A of the Regional Rural Bank Act, 1976. The bank was established by the amalgamation of Howrah Gramin Bank, Bardhaman Gramin Bank and Mayurakshi Gramin Bank. The tagline of the bank is "Bank for U - Banking for All".

Allahabad UP Gramin Bank is a regional rural bank (RRB) in Prayagraj, Uttar Pradesh, India.

<span class="mw-page-title-main">Uttar Bihar Gramin Bank</span> Italian regional rural bank

Uttar Bihar Gramin Bank is a regional rural bank (RRB) in the State of Bihar, India. It is under the ownership of Ministry of Finance, Government of India. It is one of the largest regional rural banks in India in terms of branch network, staff strength and area of operation.

Public Sector Undertakings (PSU) or Public Sector Enterprises (PSE) in India are government-owned enterprises in which 51 percent or more share capital is held by the Government of India or state governments or joint ventures between multiple Public Sector Enterprises. Depending on the level of government ownership, they can be broadly categorised as Central PSUs or State PSUs. These entities include government companies, statutory corporations, banking institutions, and departmentally run companies. PSUs are officially classified into three categories, which are Central Public Sector Enterprises (CPSE) and Public Sector Banks (PSB) owned by the central government or other CPSEs/PSBs, and State Level Public Enterprises (SLPE) owned by state governments or other SLPEs. CPSE is further classified into Strategic Sector and Non-Strategic Sector. Depending on their financial performance and progress, CPSEs are granted the status of Maharatna, Navaratna, and Miniratna.

<span class="mw-page-title-main">Karnataka Vikas Grameena Bank</span> Indian regional rural Bank

The Karnataka Vikas Grameena Bank (KVGB), an Indian Regional Rural Bank sponsored by Canara Bank. It is under the ownership of Ministry of Finance, Government of India. The bank provides retail banking services to rural users and has 629 branches in areas of Karnataka, around North and Western Karnataka.

Kaveri Grameena Bank was a Regional Rural Bank established under Regional Rural Banks' Act 1976, was a Scheduled Bank jointly owned by Government of India, State Bank of India and Government of Karnataka, permitted to carry all kinds of banking business. The Bank was operating in 22 Districts of South Karnataka, having its Head Office at Bellary City with Nine Regional Offices at Mysuru, Mandya, Bengaluru, Tumakuru, Hassan, Chamarajanagar, Madikeri, Chikmagulur and Ramanagara etc.

<span class="mw-page-title-main">Uttarakhand Gramin Bank</span> Regional rural bank in India

Uttarakhand Gramin Bank is a regional rural bank in India.It is sponsored by State Bank of India established under RRB Act 1976 came into existence on 1 Nov 2012 after amalgamation of erstwhile RRB viz. Uttaranchal Gramin Bank and Nainital Almora Kshetriya Gramin Bank in Uttarakhand State. It is under the ownership of Ministry of Finance, Government of India. The Bank is headquartered at Dehradun and presently its area of operation in all 13 Districts in Uttarakhand having 288 branches, 11 satellite offices, 2 extension counters, and 6 regional offices.

Krishna Grameena Bank was an Indian Regional Rural Bank (RRB) established under 1976 Act for Regional Rural Banks. It was merged into Pragathi Krishna Gramin Bank in august 2013 which would later be merged into Karnataka Gramin Bank.

Pragathi Gramin Bank was an Indian Regional Rural Bank (RRB) established under Regional Rural Banks' Act 1976. The bank was permitted to carry all kinds of banking business and provided banking services to individuals and small businesses.

References

  1. ↑ "Govt provides Rs 670-cr support to Regional Rural Banks to meet regulatory capital". The Financial Express. 1 November 2020. Retrieved 2 June 2021.
  2. ↑ Bhattacharjee, Subhomoy (7 September 2019). "The largest rewrite of the banking history and merger's cultural traps". Business Standard India. Retrieved 2 June 2021.
  3. ↑ RRBs
  4. ↑ "Reserve Bank intrigues: Was KC Chakrabarty set up?". Moneylife NEWS & VIEWS. Retrieved 2 June 2021.
  5. 1 2 3 4 5 Recapitalization of Regional Rural Banks (RRBs) to improve their Capital to Risk Weighted Assets Ratio (CRAR)
  6. ↑ Jog, Sanjay (4 April 2011). "Regional Rural banks revamp in line with Chakrabarty report". Business Standard India. Retrieved 2 June 2021.
  7. ↑ "Amalgamation of RRBs: 25 merged into 10 in nine months - Indian Express". archive.indianexpress.com. Retrieved 2 June 2021.
  8. ↑ "Reserve Bank of India - Reports". www.rbi.org.in. Retrieved 2 June 2021.
  9. ↑ "Mega boost to Regional Rural Banks: Govt to infuse ₹670 crore". mint. 1 November 2020. Retrieved 2 June 2021.
  10. ↑ The Regional Rural Banks Act, 1976
  11. ↑ "list of SCB".
  12. ↑ Kumar, N. Ravi (9 May 2019). "Rural banks to be merged in TS, AP". The Hindu .
  13. ↑ "दैनिक जागरण: बैंकों का विलय : एक हुए UP के तीन बैंक, अब बड़ौदा यूपी बैंक नाम से जाने जाएंगे".
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