advantages and disadvantages of regional rural bank

RRBs will be required to adopt new income recognition norms and exposure limits for borrowers.

Due to the constant efforts, at recapitalizing RRBs, at the end of March, 2000, 158 RRBs are posting operating profits.

Rural development is planning that is guided by policies in the area with the aim of improving the livelihood of the people in the rural areas.

Out of all these branches of RRBs, 4,042 are the rural branches as on June 30, 2014 which constitute about 21.4 per cent of the total branches of RRBs.

The Government took systematic merger plan of RRBs on state-wise basis and one RRB started to function in each state province on 31st August, 2005 and as a result, the number of Regional Rural Banks (RRBs) had reduced to 92 from 196 due to amalgamation of RRBs sponsored by the same bank in a state. Though the Unit Banking has a number of advantages, it doesn’t mean, “The International Year of Eco-tourism” due to its imperative role in sustainable development.

Unsatisfactory Performance 6.

Towards that end their issue capital has been raised from Rs 25 lakh to Rs one crore in the case of 140 banks and Rs 50 lakh in the remaining cases. As on March 31, 2002 total outstanding deposits of RRBs stood at Rs 44,327.81 crore and total outstanding advances stood at Rs 18,586.97 crore.

This figure compares favorably with that of opening of 521 branches in 2010-11 and 299 branches in 2009-10. Further, the increasing number of defaulters has hampered the recycling of cash.

Rural development exists out of a number of different generations and the failures that occurred during the first generations are used to improve the programmes and the Rural Development Programmes for the following generations to come. This helps the officers to chart ways in which they can reach people easily, communicate effectively with the rural populace, suggest they engage with the banks to secure necessary finances for future activities. A host of PSBs have taken a decision to merge some of their RRBs on a state-wise basis. The Regional Rural Banks (RRBs) have been experiencing an unsatisfactory performance since last few years. It is the method of banks’ approach to the customers for sale of their products.

The Government should also try to evolve a rural banking structure and base of RRBs with adequate financial strength and management and organisational skills of the commercial banks. Regional Rural Banks (RRBs) came into existence in India in September 1975.

For 2012-13, a target of opening 1845 new branches has also been set.

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Suggestions to Raise the Degree of Viability of Regional Rural Banks: Essay # 9. Exams, Oliveboard Live Courses & Mock Test Series, © 2020 - All Rights Reserved, Today, RRBs are widely spread and are a fundamental part of the banking sector. Solar Energy and its Opportunities Rural development is discussed in this assignment with the different components that it exists out of. There has recently been three innovations used in Asia, the higher variety of rice, spread of irrigation in the country and introduction of trackers to the farmers. Recapitalisation 8.


In order to make Financial Inclusion Plan of the government effective and to expand the penetration of banking network in unbanked and under-banked rural areas, regional rural banks (RRBs) also worked out its branch expansion plan for 2011-12 and 2012-13 with 10 per cent increase over the previous year. These people require a bank account for various purposes like receiving MNREGA Wages, Government grants, to buy products for agricultural purposes (tractors, machinery, etc.) Although the central government released about Rs 468.9 crore during 2010-11 and 2011-12 to 21 RRBs, but the process to recapitalisation could not be completed in 2011-12 as all the related state governments could not release their share towards recapitalisation.

The Committee mentioned three basic problems of RRBs: (a) RRBs have a low earning capacity due to so many restrictions placed on the business undertaken by these banks; (b) With the recent award of a tribunal the wages and salary scales of RRBs would be similar to that of commercial banks and thus the very idea of low cost alternative to the operation of commercial bank has been nullified; and. Till 1 January 2013, 22 RRBs had already been amalgamated into 9 RRBs. It is, therefore, not surprising that these banks, established for the purpose of providing an impetus to rural growth have dismally failed to boost agro-based rural economy.

However, in 1990, with implementation of the National Industrial Tribunal (NIT) Award in case of the employees of the RRBs, the structure of their emoluments was brought at par with that of the staff of the scheduled commercial banks.

Regional Rural Banks have also established functional superiority over other commercial banks of the country.

1991-92, the RRBs disbursed only Rs 1,107 crore among 23 lakh rural people drawn from the weaker sections of the society. The weak condition of RRBs has been reflected from the fact that many have completely wiped out their equity and reserves and in some, the losses are even eating into deposits. Solar energy, Advantages And Disadvantages Of Rural Development, 1. IBPS RRB PO/ Clerk Preparation Sources, Crack IBPS Clerk 2020 Online Course – Join Now, Join EDGE Courses for Bank Exams – Get personal mentoring by experts, IBPS RRB PO Mock Test – Attempt a FREE Mock Test Now, Motivating Success Story of Naina Soni – Cleared IBPS PO 2019, IBPS RRB Clerk Previous Years Cut off Marks – For 2019, 2018, & 2017, Live Video & Audio Interaction with the faculty, 15+ Live Practice Sessions (led by faculty), Previous year Topper sessions for tips and strategies. Penetration level in rural areas was substantially lower than in urban areas.

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Again, total amount of credit advanced to the agriculture by the RRBs increased considerably from Rs 6,069.79 crore in 2002-03 to Rs 43,968 crore in 2010-11. But there are some inherent factors which are very much responsible for this non-viable nature of RRBs. Urban settlements usually feature an abundance of man-made structures and require more infrastructure as opposed to rural areas, which contain more open space. One of the major contributory factors responsible for the mounting losses suffered by the RRBs has been very high overheads; in which a sizeable component is salaries.

Advantages Disadvantages of Regional Rural Bank, 2. Test Your Preparations Here By Attempting A Free Mock Test. RRBs have limited options in the products and services they offer compared to commercial banks. The economic position of the common man has been rapidly improving due to the …

In respect of credit operations, RRBs were successful in identifying the target groups and also in meeting their credit requirements. RRBs are also advancing loans to weaker sections and physically handicapped persons under differential rate of industrial (DIR) schemes. Accordingly, the central government share works out to Rs 1,100 crore.

In terms of size alone, the rural markets were huge to be ignored. The performance of RRBs has improved considerably as the percentage of their gross NPAs and net NPAs has reduced. Out of the 196 RRBs, 170 RRBs are making profit in recent years after introducing measures under banking reforms. 3. There are a lot of reasons for this: However, passing JAIIB/CAIIB exams can entitle the RRB Officers for higher increments in the serving bank. Share Your PPT File, Public Sector Enterprises or Undertakings in India. By according priority to revival of viable RRBs instead of tackling the problem in a generalized manner, it is expected to bring down considerably the losses of RRBs and make them stand on their own feet.

The successes and failures of rural development in Europe, Asia, Africa and Latin America have also been discussed. Moving to the country. They were started to provide banking facilities to the rural populace and to ensure greater financial inclusion.

More sewers, roads and public-lighting fixtures are required to maintain safe and sanitary conditions for urban residents.

4. or start a new business. As suggested by CRAFICARD, the areas of operation of a RRB branch never offer sufficient potential for business and thus to attain viability this branches may cover the neighbouring districts. First and foremost, ecotourism can bring economic advantages by creating job opportunities and income for people living in rural areas (Malaysian Institute of Economic Research [MIER], n.d.). (c) The very area of operations of RRBs is also being utilised by the sponsoring banks by running their own rural branches leading to certain anomalies like duplication of services and expenditures on control and administration.

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In the mean time, the regional rural banks have extended their network throughout the country to a considerable extent.

RRBs exist for a specific purpose and that is to help provide credit and banking facilities to the rural people (farmers, entrepreneurs, and rural co-operative societies). The spread of the population over the land mass means that there are clusters of populated areas over a relatively small land mass i.e.

There is also a focus on the environmental concerns of the rural areas trying to ensure a sustainable development with the minimum impact on the environmental conditions (Ploeg & al, 2000, p. 390). Retail Banking – Meaning, Advantages and Disadvantages. Among all the states, Uttar Pradesh is the state where larger number of RRB branches has already been opened. As per the recommendations of the Working Group on Rural Banks, the regional rural banks were established in 1975 for supplementing the commercial banks and co-operatives in supplying rural credit. 5. The NIT award has enhanced the salary-allowance bill of RRBs by 35 per cent during the last three years, apart from increase in its other concomitant expenditure.

The study adopts different literatures and other academic sources and personal observation was explored in the analysis.

Majority of customers of Regional Rural Banks are daily workers and farmers, involved in Agrarian economy.These people require a bank account for various purposes like receiving MNREGA Wages, Government grants, to buy products for agricultural purposes (tractors, machineries, etc.) For your information, renewable energy in four distinctive applications: electricity generation, water heating, motor-power and energy supply in rural area. As per the latest data available with the National Bank for Agriculture and Rural Development (NABARD), the total accumulated losses of all Regional Rural Banks, operating in the country are estimated at Rs 2,176 crore as on 31st March, 1996.

Another important matter that has also been noticed is that most of the branches of RRBs are opened in unbanked centres and thus the deposits mobilised by them are fresh deposits and are not diverted from the deposits per branch of RRBs established before 1980 is uniformly higher in almost all the states of the country. The regional rural banks are maintaining its special charter it their of operation is very much limited to a definite region, grant direct loan to rural people at concessional rates and receive subsidies and concessions from the Reserve Bank and the sponsoring bank.

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