History of Regional Rural Banks(RRBs):: By K kundan sir 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 Gandhis 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 the first RRB, the Prathama Bank. Also on 2 October 1976 five regional rural banks were set up on 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.
Posted on: Fri, 05 Sep 2014 17:51:24 +0000
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