Regional Rural Banks – Introduction As Well As Objectives

Friends, inwards our previous posts, nosotros induce got discussed virtually diverse cooperative banking institutions. In this post service nosotros shall bargain alongside diverse aspects of Regional Rural Banks. After Independence the major aim of the credit policy inwards our province has been to expand institutional financing alongside a stance to curtail the role of non-institutional credit agencies similar coin lenders. The All Republic of Republic of India Rural Credit Survey Committee (1951) perceived that alone multipurpose cooperatives tin live on a feasible solution to the work of rural finance.

Cooperative Banks at diverse levels were supported past times their respective province governments in addition to the RBI. Much was expected from the cooperative credit all the needs of the farmers movement. However co-operative credit establishment could non meet. All Republic of Republic of India Rural Credit Survey Committee (1969) recommended a multi means approach, to finance the rural sector. The commission observed that co-operative institutions to a higher house could non render adequate credit to farmers since they did non induce got the required fiscal resources. Credit gap continues to be inwards the rural sector. Rural banks were conceived to distich the gap. The thought was initiative of all generated inwards the study submitted past times the Banking Commission 1972. The Commission was non convinced that commercial banks were equipped structurally to fill upwards the credit gap. It recommended the establishment of rural banks to strengthen the cooperative banking system. But these recommendations were non accepted past times the Government of India.
The thought of establishing rural banks was in i trial once again raised inwards the twelvemonth 1975 every bit business office of the Prime Ministers “20 Point Economic Programme“. A “Working Group on Rural Banks”  headed past times Sri. M. Narasimham was develop inwards 1975 to assay inwards dept the setting upwards of rural banks every bit subsidiaries of world sector banks to cater to the needs of the rural people. The working grouping concluded that both the commercial banks also every bit cooperative credit institutions could non adequately meets the credit needs of the target grouping comprising small-scale farmers, marginal farmers, agricultural laborers, landless laborers, rural artisans, petty traders in addition to other weaker sections of the society. It felt the necessity of creating a novel establishment which combines the local experience in addition to familiarity alongside rural problems which the co-operatives possess in addition to the grade of describe of piece of work concern organization, mightiness to mobilize deposits, access to key coin markets in addition to a modernized outlook which the commercial banks have. Majority of the recommendations made past times working grouping were accepted past times the Government of India. Base don the recommendations of the Group the Government of India began to found Regional Rural Banks from sec Oct 1975 onwards. In the commencement they were established nether the Presidential Ordinance on RRBs. But afterwards nether the Regional Rural Banks Act which was passed inwards Feb 1976.

Objectives of Regional Rural Banks (RRBs)

The objectives behind the establishment of Regional Rural Banks are :
  1. To select the banking services to the doorsteps of rural masses specially inwards hitherto unbanked rural areas. 
  2. To brand available institutional credit to the weaker sections of the gild who had for lilliputian or no access  to cheaper loans in addition to had perforce been depending on the someone money-lenders. 
  3. To mobilize rural savings in addition to channelize them for supporting productive activities inwards the rural areas.
  4. To practise a supplementary channel for time period of credit from the key moeny marketplace to the rural areas through refinance.
  5. To generate utilisation opportunities inwards rural areas 
  6. To convey downwardly the toll of purveying credit inwards rural areas.
That’s all for straightaway friends. In our adjacent post service nosotros shall hash out virtually the Structure, Capital, Functions in addition to other of import details of Regional Rural Banks. Happy Reading 🙂 
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