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EEO. 2020; 19(2): 2238-2244

Regional Rural Banks (RRBs): The Backbone Of Rural Economy

Dr. Sharad Kumar Bhatnagar.


Banking is an industry which handles credit, cash and important financial services for individual consumers and businesses of urban & rural areas both. Banking sector provides the liquidity needed for all citizens and entrepreneurs to establish their own business with future investment also. In the chain of banking sector the Regional Rural Banks (RRBs) are one of the key drivers of the rural economy. RRBs are Indian Scheduled Commercial Banks operating at regional level in various states of our country. They have been created with a special view to provide basic banking and financial services primarily in the rural areas of India. Basically, the Regional Rural Banks are commercial scheduled banks for Indians. These banks have been empowered to conduct financial transactions to promote growth and development in rural areas. Regional Rural Banks were established under the term of the 26th September 1975 ordinance and the RRB Act of 1976. RRBs came in force to ensure sufficient flow of credit for farmers and other agricultural sectors of rural areas. These were established as government sponsored regional based rural lending institutions. The Primary object of Regional Rural Banks are to consider the credit needs of small and marginal farmers, fishermen, agricultural labourers as well as of cooperatives and merchants with other socio-economically weaker persons also. Regional Rural Banks perform different type of functions such as providing financial facilities to rural and semi-urban areas and carrying out government operations like disbursement of wages among the workers and easily distribution of pensions to deserving senior citizens as well as providing Para-banking facilities like locker facilities, debit and credit cards, mobile/internet banking facilities also. RRBs are the main strong pillars of Rural Development.

Key words: Regional Rural Bank, Commercial Bank, Financial Service, Credit Institution, Semi-urban Area, Rural Development.

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