Regional Rural Banks in India

1. Sponsoring Commercial Bank (35%) 

1. Objective: To provide banking and credit facilities in rural areas, especially to small farmers, artisans, and micro-entrepreneurs. 

Features of Regional Rural Banks

1. Primarily serve rural and semi-urban areas 

1. Offer savings accounts, fixed deposits, recurring deposits, and loans 

1. Focus on agriculture, small businesses, and microfinance 

1. Sponsored by major commercial banks for guidance and oversight 

1. Operate under the supervision of RBI and NABARD 

List of Regional Rural Banks in India 

Note: India has over 43 RRBs operating in various states under different sponsoring banks. 

Objectives and Role of RRBs 

1. Provide credit and banking facilities to small farmers and rural entrepreneurs 

1. Promote financial literacy and inclusion in rural areas 

1. Support government schemes like PM Kisan, MUDRA loans, and agricultural subsidies 

1. Enhance rural development and strengthen the agriculture sector 

Benefits of Regional Rural Banks 

For Rural Customers 

1. Easy access to loans, savings accounts, and fixed deposits 

1. Affordable microfinance and crop loans 

1. Personalized banking in local languages 

For Banks and Government 

1. Extends reach of commercial banks in rural areas 

1. Helps implement social and development schemes 

1. Strengthens rural economy and reduces urban migration 

Challenges Faced by RRBs

1. Limited branch network compared to commercial banks 

1. Dependence on sponsoring banks for capital and technology 

1. Competition from cooperative banks and private banks 

1. Need for digital transformation and modernization