Rrbs, which were formed under the rrb act, 1976, provide credit and other facilities to small farmers, agricultural labourers and artisans in rural areas. The total number of regional rural banks functioning in the country as at the end of june1999 was 196 covering 451 districts spread over 23 states with the network of14,467 branches these banks have been established by the government of india in terms of the provisions of regional rural banks act, 1976. Three up regional rural banks to be amalgamated 28 nov, 2019, 08. Regional rural banks rrbs set up under the rrb act, 1976 provide credit and other facilities to small farmers, agricultural labourers and artisans, among others, in the rural areas. Regional rural banks agricultural finance indiaagronet. Regional rural banks were set up on the basis of the recommendations of the narasimham working group 1975, and after the legislations of the regional rural banks act, 1976.
The development process of rrbs started with the promulgation of an ordinance promulgated on 26th september 1975 which later on was replaced with regional rural bank act, 1976 with an objective to ensure. The institution of regional rural banks rrbs was created to meet the. The ministry of corporate affairs recently issued a notification exempting regional rural banks rrbs from the applicability of the merger control regime in india. What is the reason behind merging of regional rural bank.
An act to provide 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. In this act, unless the context otherwise requires, a board, in relation to a. As the result of this recommendation a working group headed by mr. The genesis of the rrbs can be traced to the need for a stronger institutional arrangement for providing rural credit. A study on indian rural banking industryissues and challenges. The rrbs are owned by central government, state government, and the sponsor banks. Regional rural banks rrbs are the indian scheduled commercial government banks operating at regional level in different states of india. Cci approval for merger of regional rural banks not required. Mar 10, 2015 regional rural banks came into existence on gandhi jayanti in 1975 with the formation of a prathama grameen bank.
Their equity is held by the central government, concerned state. The regional rural banks act, 1976 legislation vlex 29633667. The trend towards inclusive banking again got a shot in the arm in the mid1970s when a new set of commercial banks, the regional rural banks rrbs, were introduced to improve the efficacy of the rural credit delivery mechanism. The total number of sbis regional rural banks in india branches is 2349 16%. A study on merger impacts of regional rural banks in india. The term of the non official directors appointed by the central government is proposed to be fixed not exceeding two years. The board may, after consultation with the 7 national bank, the concerned state government and the sponsor bank and with the prior approval of the central government, from time to time, increase the issued capital of the regional rural bank.
A bill to amend the regional rural banks act was passed by parliament today, with government saying it was necessary to empower such financial. 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. Regional rural banks came into existence on gandhi jayanti in 1975 with the formation of a prathama grameen bank. The rural banks had the legislative backing of the regional rural banks act 1976. May 19, 2020 three up regional rural banks to be amalgamated 28 nov, 2019, 08.
Regional rural banks rrbs were established in 2nd october,1975 under the provisions of the ordinance promulgated on the 26th september 1975 and followed by regional rural banks act, 1976 with the aim of developing rural economy in all areas like agriculture, trade, commerce, industry and other productive activities in the rural areas, credit and other facilities, particularly to small and. U have seen the answers which mention only that rrbs are loss making banks. Prime motive was towards mass banking not on class banking. Rural banks act, 1976 21 of 1976 hereinafter referred to as the. Problems and prospects of regional rural banks in india. Performance evaluation of regional rural banks in india. Regional rural banks were set up after nationalizations of banks in 1969 when emphasis shifted to providing more credit to weaker sections. Aug 24, 20 the total number of regional rural banks functioning in the country as at the end of june1999 was 196 covering 451 districts spread over 23 states with the network of14,467 branches these banks have been established by the government of india in terms of the provisions of regional rural banks act, 1976. Regional rural banks are established under the provisions of an ordinance promulgated on the 26th september, 1975 and the rrb act, 1976 with an objective to ensure sufficient institutional credit. The union cabinet today gave its approval to the proposed amendments in the regional rural banks rrbs act, 1976 to enhance authorized and issued capital to strengthen their capital base. The regional banks were established by the central government in 1975 to provide basic financial and banking services in rural parts.
Jan 31, 20 the union cabinet today gave its approval to the proposed amendments in the regional rural banks rrbs act, 1976 to enhance authorized and issued capital to strengthen their capital base. Regional rural banks merger gets exemption from seeking. An act to provide for the incorporation, regulation and winding up of regional rural banks with a view to developing the rural. Regional rural banks in eastern uttar pradesh the government of india accepting the recommendations made by the working group, promulgated an ordinance on september 26, 1975, for setting up regional rural banks. As per a recent notification, the corporate affairs ministry said the mergers of rrbs directed by the government have been exempted from seeking cci approval. The notification provides that sections 5 and 6 of the competition act 2002, which regulate combinations, will not apply to amalgamations of rrbs for which the government has issued a notification under the regional rural. Rrbs were configured as hybrid micro banking institutions, combining the local orientation and small scale lending culture of the cooperatives and the business culture of commercial banks. Govt to merge regional rural banks rrbs 56 to 36 gr8ambitionz. Rural people in india are still facing problems for inadequate supply of credit. The performance of regional rural banks rrbs in india. Regional rural banks rrbs are financial institutions which ensure adequate credit for agriculture and other rural sectors.
Regional rural banks rrbs were set up as governmentsponsored, regional based rural lending institutions under the regional rural banks act, 1976. Regional rural banks rrbs set up under the rrb act, 1976 provide credit and other facilities to small farmers, agricultural labourers and artisans, among others, in the rural areas currently, there are 56 rrbs. The union cabinet, chaired by the prime minister shri narendra modi, today approved the amendments in the regional rural banks rrbs act, 1976 to enhance authorized and issued capital to strengthen their capital base and to bring flexibility in the shareholding between central government, state government and sponsor bank. Aug 20, 2017 regional rural banks rrbs set up under the rrb act, 1976 provide credit and other facilities to small farmers, agricultural labourers and artisans, among others, in the rural areas. Mar 24, 2020 regional rural banks rrbs are the indian scheduled commercial government banks operating at regional level in different states of india. Amuthan excel business school, salem banks play an important role in mobilization and allocation of resources in our country. The regional rural banks act, 1976 legislation vlex. May 19, 2015 the regional rural banks act has been incorporated on 9th february, 1976. All rural banks created and organized under the provisions of this act shall be exempt from the payment of all taxes, fees and charges of whatever nature and description, except the corporate income tax and local taxes, fees and charges, for a period of five 5 years from the date of commencement of operations. The government of india promulgated the regional rural banks ordinance on 26 th september 1975, which was later replaced by the regional rural bank act 1976.
Subsequently, the rrbs were set up through the promulgation of rrb act1 of 1976. The act was amended in 2015 whereby such banks were permitted to raise capital from sources other. The rrbs act, 1976 succinctly sums up this overall vision to subserve both the. All rural banks created and organized under the provisions of this act shall be exempt from the payment of all taxes, fees and charges of whatever nature and description, except the corporate income tax and local taxes, fees and charges, for a period of five 5. Narsimham rao, rrbs came into existence in 26th september, 1975 and rrb act, 1976 with an objective to ensure sufficient institutional credit for agriculture and other rural sectors. Parliament passes amendment to regional rural banks bill. On 31 march 2016, there were 56 rrbs postmerger covering 525 districts with a network.
The regional rural banks were setup on the basis of narsimham committee report 1975, by the legilations of the regional rural banks act of 1976. The regional rural banks act, 1976legislative department. Under the rrb act 1976, 50% stake in regional rural banks rrbs would be with the central government, 15% with the state government concerned and the remaining with the sponsor bank. Halima at the arb apex bank for providing support during the. The other 4 regional rural banks were opened in gorakhpur up, malda wb, bhiwani haryana, and jaipur rajasthan the 1975 ordinance was later replaced by regional rural banks act, 1976. Cabinet approves amendments in regional rural banks act, 1976. The regional rural banks act, 1976 the schedule see section 25 2 i, do hereby, declare that i will faithfully, truly and to the best of my skill and ability execute and perform the duties required of me as a director, member of a committee, officer, employee or auditor as the case may be of the regional rural bank and which properly. Till date in rural banking in india, there are 14,475 rural banks in the country of. An act to provide 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. Pdf the performance of regional rural banks rrbs in.
The rural banks of sbi is spread in states extending from kashmir to karnataka and himachal pradesh to north east. This act allowed the government to set up banks from time to time wherever it considered necessary. Regional rural banks rrbs banks were formed under the rrb act, 1976, with an objective to provide credit and other facilities to small farmers. The notification provides that sections 5 and 6 of the competition act 2002, which regulate combinations, will not apply to amalgamations of rrbs for which the government has issued a notification under the regional rural banks act. They have been created with a view of serving primarily the rural areas of india with basic banking and fina. Notwithstanding anything contained in this act, if the central government, after consultation with the national bank, the concerned state government and the sponsor bank, is of the opinion that it is necessary in the public interest or in the interest of the development of the area served by any regional rural bank or in the interest of the regional rural banks themselves, that two or more. Be it enacted by parliament in the sixtysixth year of the republic of india as follows. Jun 28, 2017 the other 4 regional rural banks were opened in gorakhpur up, malda wb, bhiwani haryana, and jaipur rajasthan the 1975 ordinance was later replaced by regional rural banks act, 1976.
Apr 16, 2016 regional rural banks rrbs were set up as governmentsponsored, regional based rural lending institutions under the regional rural banks act, 1976. Regional rural banks in india top bank exam tutorials in. A study on merger impacts of regional rural banks in india isbn. An act to provide 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. Dileep s, lecturer, department of mba, dayananda sagar academy of technology and management, bangalore 560 074. The government of india, ministry of corporate affairs mca has exempted nationalized banks from the applicability of the merger control regime under the competition act,2002 act. The preamble to the act states the objective to develop rural economy by providing credit and facilities for the development of agriculture, trade, commerce, industry and other productive. The institution of regional rural banks rrbs was created to meet the excess demand for institutional credit in. Regional rural banks mergers gets exemption from cci. It was subse quently replaced by regional rural banks act of 1976 dated february 9, 1976.
Regional rural bank mergers exempt from control provisions. The authors would also like to extend special thanks to mr. An act to provide 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. Regional rural banks rrbs are indian scheduled commercial banks government banks. The regional rural banks act has been incorporated on 9th february, 1976. Regional rural banks mergers gets exemption from cci ambit. Since rrb act was introduced to serve the rural, backward class people to be bring them under banking fold. The case of rural and ajai nair and azeb fissha community banks in ghana. This act allowed the government to set up banks from time to. Regional rural banks priority sector lending targets. Pdf the performance of regional rural banks rrbs in india. Apr 28, 2015 a bill to amend the regional rural banks act was passed by parliament today, with government saying it was necessary to empower such financial institutions which are the jewel in the crown of. Jul 30, 2017 the regional banks were established by the central government in 1975 to provide basic financial and banking services in rural parts. An act to provide 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 labourer artisans and small.
A regional rural bank is popularly known as gramin bank. Each district had a bank and a network of branches in a single. Organisation, functions and management of regional rural. Central government exempts nationalized banks and rural. Regional rural banks were established under the provisions of an ordinance promulgated on the26th september 1975 and the rrb act, 1976 with an objective to ensure sufficient institutional credit for. In this act, unless the context otherwise requires. Rural banks act, 1976 21 of 1976 read with section 17 thereof and in supersession of the regional rural banks appointment and promotion of officers and other employees rules, 1998 except as respects things done or omitted to be done before such supersession, the central government after. Neft access criteria for regional rural banks rrbs nov 18, 2011 rbi master circular on branch licensing regional rural banks rrbs jul 07, 2011 internet banking facility for customers of regional rural banks nov 21, 2015.
Sbi has 30 regional rural banks in india known as rrbs. An act further to amend the regional rural banks act, 1976. As a result, five regional rural banks were set up on 2 october 1975,gandhi jayanti. Thereafter, the first regional rural bank was setup in 1975 itself by the name prathama grameen bank. Jan 11, 2018 the ministry of corporate affairs recently issued a notification exempting regional rural banks rrbs from the applicability of the merger control regime in india.