How Many RRB Banks are in India

Introduction

This engaged group of banks provide financial services to rural Indians, and by doing so, is helping create a better future for the country's economy. With a total of 56 RRBs in India, candidates across the country look forward to getting recruited in one of these and joining the banking sector. These banks are now looking to the US to help them develop better products in order to fulfil an anticipated wave of financial inclusion in the years ahead. As part of this, the Micro Finance Institute has partnered with Google on a project that offers solutions to its rural customers who are unbanked. The project will also equip them with essential digital financial products and services offered through the technology giant's platform.

Ownership

Ownership of regional rural banks in India is a cross-sectional model. The majority ownership of these banks is held by individuals with businesses and trust-based organisations.

Features

While most banks are present only in cities and metropolitan areas and in the brick-and-mortar form, rural banks have mushroomed to secure the economic, financial and social well-being of the rural people in the interior areas of states.

The rural banks have been formed in such a manner that their locations have been predetermined mainly to serve the areas in which their depositors reside.

They have been set up as per the dictates of the state government by creating new types of institutions created primarily to meet the demands of the people. It is important for the policymakers and those involved in the banking sector ie the government should ensure the efficient operation of the banks by streamlining their operations. In the scope of decentralisation, more attention should be paid to designing sustainable rural development programmes to understand the functioning and the characteristics of these banks. The effective implementation of the activities of these banks depends very much on the location of their branches and their deployment of staff in rural areas. The proliferation of their branches, the effective deployment of their staff and the additional facilities that they provide to the rural areas are the important factors that can help manage rural poverty in the country.

Functions

There is a growing need for banking services, especially in the rural areas of India accompanied by the emergence of private service providers in these areas. For this objective, the Reserve Bank of India (RBI) has adopted the Regional Rural Banks (RRBs) as a key instrument to foster and promote financial service delivery in rural areas.

The six major functions of RRBs are

• Providing rural banking facilities

• Catering to the unbanked rural areas

• Promoting agricultural activities and allied business

• Co-ordinating activities of the rural cooperative banks

• Promoting rural credit

• Promoting financial inclusion and mobilising funds for financial infrastructure in rural areas.

Objectives

The main objective of regional rural banks in India is to enable banking infrastructures to serve the national objective of food security and rural development. This is achieved by them providing a range of services to the farmers of the rural areas that they service. They offer loans, agricultural insurance, microcredit, and credit cooperatives, which allow farmers to participate in the financing, production, and distribution of crops and farm output. Farmers who use farming services offered by many different types of institutions can gain access to a variety of markets, lenders, insurance agents, and service providers.

Regulations

Regulatory guidelines governing the functioning and administration of Regional Rural Banks were framed by the Reserve Bank of India with a view to

• Promote the interest of depositors

• Improve the efficiency of management of the banks

• Promote rural development.

• Protect the interest of depositors from the criminal activities of certain unscrupulous borrowers and their promoters

Conclusion

The objective of RRBs in India is to produce a financial return to its owners with stability, resilience and sustainability in the midst of changing market dynamics. They provide a different kind of service to their target customers compared to big banks like ICICI and HDFC. In a lot of cases, RRBs focus on providing community banking products. They are more likely to have a relationship with the local club or temple, and they don't tend to be as prevalent in malls and other big buildings. There are numerous other distinguishing characteristics of these small banks, but the most salient difference is the focus they put on their target customers.