Regional Rural Banks


Regional Rural Banks in India : : Banking System in India | Imperial Bank of India | Nationalization of Banks | Other Financial Institutions

  • Set up in 1975. Their main objective is to develop the rural economy by providing credit and encouraging other productive activities in the rural areas.
  • The paid – up capital of each rural bank is [rupee] 25 lakh, fifty percent of which is contributed by the Central Government, 15 percent by the State Governments and 35 percent by the sponsoring public sector commercial banks which are responsible for the actual setting up of the RRBs.
  • The Reserve Bank of India Act, 1934 has classified the banks as Scheduled Banks and Non – Scheduled Banks.
  • Note : The Scheduled banks are those which have a paid-up capital and reserves of an aggregate value of not less than [rupee] 5 lakh and which satisfy RBI that their affairs are carried out in the interests of their depositors.
  • These banks have been entered in the Second Schedule of the RBI Act, 1934. All commercial Banks – Indian and Foreign, RRBs and State Co – Operative Banks are Scheduled banks.

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