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Regional rural Banks - a few points.

This write up will give a general idea.  However in case you attend RRB interview, you are requested to go through the website of the concerned sponsoring bank and RRB also.





REGIONAL RURAL BANK The RRBs were set up by an ordinance in 1975, later replaced by RRBs Act, 1976 as pre Banking Commission recommendation in 1975. The Govt. of India had appointed a Working Group on rural Banks under the chairmanship of Mr. M. Narasimham in 1975. First 5 RRBs were set up on 2 nd Oct.,1975 on Gandhi Jayanti during the prime ministership of Indira Gandhi at the time of her announcement of economic programme for uplifting of the rural community. At the end of June 1985, 183 RRBS with the network of 10,245branches have opened in the states of the Indian union. .

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At the end of June 1999,196 RRBs are functioning in the countries which had covered 451 district spread over 26 states with the network of 14467 branches. At present there are 82 RRBs in the country which are working for the rural development. Before Sep. 2005, there were 9 RRBs in Gujarat. 3 were sponsored by BOB 3 were sponsored by Dena Bank 3 were sponsored by SBI On 12 th sep, 2005 , 3 Banks( sponsored by BOB) merged into one i.e. known as Baroda –Guj Grameen Bank Its Head office is in Bharuch .

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3 Banks (sponsored by Dena Bank) merged into one i.e. Dena- Guj Grameen Bank. Its H.O. is in Gandhinagar. 3 Banks (sponsored by SBI) also merged into one i.e. SBI- Guj Grameen Bank. Its H.O. is in Rajkot.

Baroda -Guj Grameen Bank:

Baroda -Guj Grameen Bank Baroda –Guj Grameen Bank has 132 branches in Gujarat. It is covering 12 districts in Gujarat Vadodara, Panchmahal , Anand, Godhra, Bharuch, Dahod, Kheda, Narmada, Surat, Dang, Navsari, Valsad. Regional offices are in Godhra (67) and Valsad (65) In Vadodara there are 4 branches (out of 132)


OBJECTIVES OF RRB RRBS have following objectives they are as follows:- To provide banking services to the rural people to their door steps as they are unable to get such services in the rural areas. . To provide credit facilities to the small and marginal farmers, landless laborers and person who are engage in the trade and commerce. . To mobilize rural savings and uses them for supporting productive activities in rural areas. To promote the entrepreneurship and generating employment opportunities in the rural areas.

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To spread banking habits among rural people. To study the problems of bank official in allocating the agricultural credit to beneficiaries. To study the problems faced by the farmers in getting credit from rural bank. To examine the various problems in lending policy of the bank. To strengthen the rural economy. To provide Agricultural credit .

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The Agricultural credit given by RRBs may be grouped under 3 categories: Direct Agricultural Advances: The financial assistance granted to farmers and landless agricultural labourers are treated as Direct Agricultural advances. Such loans can be given to eligible persons for creating fixed assets production credit for meeting seasonal requirements. RRBs are expected to take up the following schemes : Schemes for --- For crop production credit loans for irrigation

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c. Equipments and implements Land development Cart and animals ii) Allied Activities: Apart from the agricultural credit ,RRBs are expected to provide loans for Allied agricultural activities like Dairy, poultry, piggery, goat and sheep rearing etc . iii) Indirect Agricultural Advances : . RRBs may also finance the primary Agricultural co-operative credit Societies (PACS), Farmers Service Societies (FSS) which have large number of small and marginal farmers and landless Agricultural labourers .


CAPTIAL STRUCTURE OF RRB The authorized capital of each RRBs is one crore divided into rupees one lacs fully paid up shares of rupees 100 each. The central government may after consultation with the RBI and the sponsoring bank increase or reduce such authorized capital but it shall not be reduced below 25 lacs. The issued capital of each rural bank is Rs.25 lacs.

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The share capital of each RRB is made up of 50% fund from Central Govt. (Govt. of India),35% from the sponsor bank and rest 15% from State Govt. The Board of Directors of rural banks may, after the consultation with the RBI and the sponsoring bank with the prior approval of the central Government increase the issue of share capital from time to time. The additional capital shall be subscribed in the same proportion as given above.

Contribution in shareholding of RRBs:

Contribution in shareholding of RRBs SHARE HOLDER CONTRIBUTION IN % Government of India 50% Sponsor Bank 35% State Government 15% Total 100%

Contribution In Baroda-Guj Grameen Bank:

Contribution In Baroda- Guj Grameen Bank SHARE HOLDER PAID –UP SHARE SHARE CAPITAL DEPOSITS IN (LACS) Government of India (50%) 150 1002.34 Sponsor Bank (35%) 105 701.64 State Government (15%) 45 300.70 Total (100%) 300 2004.68

Board members of RRBs:

Board members of RRBs In Baroda – Guj Grameen Bank the board members are: One chairman of RRB (from sponsor bank) Two BOB nominee Directors Two directors (AGM or DGM) from Govt. Of Guj. (state Govt.) One RBI nominee Director One NABARD nominee director Two directors from Govt. Of India (non official director)


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