ROLE OF REGIONAL RURAL BANKS IN RURAL DEVELOPMENT OF INDIA

Regional rural Banks play a vital role in the agriculture and rural development of India. The RRBs were setup in
1975 as the 'low cost banks' to supplement the efforts of cooperative and commercial banks. RRBs came into
existence with an objective to ensure sufficient institutional credit for agriculture and other rural sectors.. RRBs
are key financing institution at the rural level which shoulders responsibility of meeting credit needs of different
types of agriculture credit in rural areas. At present, most of the regional rural banks are facing the problems of
overdue, recovery, nonperforming assets and other problems. RRBs are usually sponsored by public sector
banks thus they keep their deposit with these bank & are also dependent for their loan operations & finance on
sponsor bank and NABARD. The objective of my paper is to study the role and working of RRBs in rural
development of India. The paper also attempts to study the role of RBI, Nabard and Central Government in
successful working of RRBs for rural development in India. The financial sector reforms that were introduced
aimed at transforming the financial institutions including RRBs into organizationally strong, financially viable
and operationally efficient units.
Introduction
Banks play an important role in