The Regional
Rural Banks (RRBs) aimed at providing credit and other facilities to the small
and marginal farmers, agricultural labourers, artisans and small entrepreneurs
in rural areas.
The RRB
Act, 1986, empowers the Central Government to establish in a State or Union
Territory one or more RRBs when any sponsor bank makes such a request The
sponsor bank assists the RRB in many ways by subscribing to its share capital,
by helping in its establishment, by assisting in recruitment and training of
its cadre, and in general providing such managerial and financial assistance
sought by the RRB.
The RRB
functions within the local limits as specified by government notification. It
can have its branches at any place as notified by the government.
Structure and Organisation of the RRB:
The
authorised capital of an RRB is fixed at Rs. 1 crore and its issued capital at
Rs. 2 lakhs. Of the issued capital, 50 per cent is to be subscribed by the
Central Government, 15 per cent by the concerned State Government and the rest
35 per cent by the sponsoring bank.
The
working and affairs of the RRB are directed and managed by a Board of Directors
consists of a Chairman, three directors to be nominated by the Central
Government, and not more than two directors to be nominated by the State Government
concerned, and not more than 3 directors to be nominated by the sponsoring
bank. The chairman is appointed by the Central Government and his term of
office does not exceed five years.
Functions of the RRB:
The functions of the RRB are as follows:
(1)
Granting of loans and advances to small and marginal farmers and agricultural
labourers, whether individually or in groups, and to co-operative societies,
agricultural processing societies, co-operative farming societies, primarily
for agricultural purposes or for agricultural operations and other related
purposes;
(2)
Granting of loans and advances to artisans, small entrepreneurs and persons of
small means engaged in trade, commerce and industry or other productive
activities within its area of co-operation; and
(3)
Accepting deposits.
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