DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : Md. Qadeer Rehman
Designation : HEAD OF SECTION
Branch : D.C.C.P.
Institute : K D R Govt, Polytechnic,
Wanaparthy.
Year : I year
Subject : Business Organization
Subject code : CCP-104
Topic : Banking
Duration : 50 mts
Sub topic : Regional Rural Banks
Teaching Aids : P.P.T, animations
CCP104.148 1
Objectives

On completion of this you would be

able to:
 Explain rural regional Banks
 Explain the purpose for its establishment
 Explain the organization of Rural Regional
Banks
 Explain the function of Rural Regional Bank
 List the difficulties of RRBS
 Explain the type of Financial support it
extend to the rural areas
CCP104.148 2
Recap:
So far we learnt about:

 The Banking Organization

 The various types of Banks
 The commercial banks, the cooperative
banks and the lead bank
 The functioning of the Bank

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Rural Regional Banks (RRBS)

 It is a Primary banking institution

 The RRBS Provide financial support to small
farmers, rural artisans for their development
 To provide Loans and advances to the Small
marginal farmers and agricultural Laborers
the banks were started

CCP104.148 4
Rural Regional Banks (RRBS)

 It is a rural bank supported by public sector

Banks to help the rural poor
 Financial support to the rural entrepreneurs
development

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Objects of RRBS

 To curtail the money lenders from exploitation

of the rural people
 To provide employment opportunities to the
educational rural youth

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Objects of RRBS
 Establishment and support of rural industries
 To promote agricultural operation, trade
commerce and industrial activities in the rural
areas
 To supplement the income of the rural people

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 Organizat
ion of State
RRBS govt

Chairm
Board Two
an directors

Member Three
Director Directors

Nominate Sponsori
Member
d by ng
Director
central bank
govt
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 Capital of
RRBS
Authorize
d capital
Rs.1 crore
Paid up
capital
Rs. 25
lakhs
Contributi
on ratio
50:15:35
Commerc
Central e
State
Govt bank
Governme
nt
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Function of RRBS
 Accepting deposits from rural people
 Providing loans and advances to the
rural educated/uneducated youth
 Providing banking ancillary services

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Function of RRBS
 Supply of equipment, inputs to farmers
 Providing marketing services
 Warehousing / godowns assistance to
needy
 All round village development activities to
be undertaken

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Problems faced by RRBS
 City / Urban oriented staff unwilling to serve
in rural areas

 Improper identification of potential borrowers

 Rigid rules for providing financial assistance

to rural youth

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Problems faced by RRBS

 Lack of cooperation among RRBS and

sponsored banks, district officials and credit
planning committees

 Differential interest rates in the banks for

financial aid

 Restrictive lending policies

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Suggestions to improve RRBs

 RRBs are to be started in rural areas

 The state government must take maximum
interest for development of RRBs
 Local area bank employees to be appointed for
RRBs

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Suggestions to improve RRBs

 Marketing, warehousing and consultative

service must be provided by RRBS only
 Relaxation in the existing rules for the
extension of financial aid
 The RRBS must be linked with the primary
agricultural credit societies, farmer services
societies

CCP104.148 15
Summary
We have discussed about:

3. The organization and objectives of RRBs and its

capital structure
4. The functioning of RRBs.
5. The difficulties faced by the RRBs
6. The suggestions for the all-round development of
RRBs

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Quiz:

1. The RRBs are the primary institutions to

be started in the

c) Rural areas only to help rural poor

d) Urban and rural areas
e) Urban and District head quarters
f) Urban and sub urban areas only

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Quiz:

1. The organization of RRBS must be

formed by the following agencies

c) Central govt
d) State and central govt
e) Central govt and public sector bank
f) State central government and public
sector bank

CCP104.148 18
Frequently Asked Questions:

1. Explain in eight sentences the organization

of RRBs.

3. Explain in eight sentences the functioning of

RRBs.

5. Explain in eight sentences the objectives of

RRBs.

CCP104.148 19