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    • 1
    • Introduction
    • Non-Institutional sources MONEY LENDERS TRADERS FRIENDS, RELATIVES etc. Institutional sources CO-OPERATIVES COMMERCIAL BANKS NABARD RRBs 6
    • THE HISTORICAL BACKGROUND OF REGIONAL RURAL BANKS IN INDIA
    • NEED FOR THE EMERGENCE OF RRB • All India Rural Credit Survey committee 1951-52 • 7.3% of rural credit was supplied by institutional sources • 92.7% by a host of non-institutional sources All India Rural Credit Survey committee 1951-52 7.3% institutional sources 92.7% by a host of non-institutional sources
    • • 1st July 1975 GOI • Chairman: Shri. M. Narasimham • 2nd October 1975 RRB Established. • RRB act 1976 • “With a view to developing rural economy by providing credit and other facilities, particularly to the small and marginal farmers, agricultural laborers, artisans and small entrepreneurs, and for matters connected therewith and incidental thereto for the purpose of development of agriculture, trade, commerce, industry and other productive activities in the rural areas.”
    • SL N O Name of the RRB and location State Name of the sponsoring commercial banks Jurisdiction in terms of district 1 Haryana Kshethriya Grmina Bank,Bhiwani Haryana Punjab National Bank Bhiwani 2 Jaipur Nagaur Anchalik Gramin Bank,Lavan Rajasthan United Commercial Bank Jaipur and Nagaur 3 Gorkhpur Kshethriya Gramin Bank, Gorakhpur Uttar Pradesh State bank of India Gorakhpur and Deoria 4 Gaura Gramin Bank, Malda West Bengal United Bank of India Malda, West dinajpur andMurshidabad 5 Pratama Bank, Moradabad Uttar Pradesh Syndiacate Bank Moradabad Source: Rural Banking in India.
    • • Objectives • Jurisdiction • Ownership • Organisation structure
    • • To provide cheap and liberal credit facilities to small and marginal farmers and other weaker sections of the society. • To save the rural poor from the money lenders. • To act as a catalyst element and thereby accelerate the economic growth in the particular region. 17
    • • To cultivate the banking habits among the rural people and mobilize savings for the economic development of rural areas. • To increase employment opportunities by encouraging trade and commerce in rural areas. • To encourage entrepreneurship in rural areas. • To develop underdeveloped regions and thereby to remove economic disparity between regions. 18
    • • 1 to 5 districts with homogeneity in agro climatic conditions and rural patrons. • In branch office usually cover 1 or 3 blocks and be in a position to finance 5 to 10 FSS.
    • • RRBs are jointly owned by  Government of India (GOI).  The State Government.  Sponsor Banks [27 scheduled commercial banks and 1 State Cooperative Bank]. • The issued capital of a RRB is shared by the owners in the proportion of 60%, 20%, 20% respectively. 20
    • 21 CENTRAL GOVERNMENT BOARD OF DIRECTORS CHAIRMAN GENERAL MANAGER HEAD OFFICE SENIOR MANAGER SM (PLANNING) SM (ACCOUNTS) SM (LOANS) SM (ADMINISTR ATORS) SM (AUDIT) AREA MANAGER Area OfficeBRANCH MANAGER FIELD OFFICER SPONSOR BANKSTATE GOVERNMENT
    • FUNCTIONS OF RRB RRBs is to mobilize financial resources RRBs charges lower rate of interest and thus they reduce cost of credit in rural areas. 22 Carrying out government operations Provides Para-Banking facilities RRBs provides banking services at the doorsteps of the rural people
    • MERGER OF RRBs 23 a. This will provide the RRBs with the infrastructure of the branch and manpower. b. The threat of non viable RRBs could be reduced. c. The undesirable competition between CBs and RRB will be minimized. • Merger will be Vertical or Horizontal
    • Year No of RRBs No of branches Net profit (cr) Profit/loss making RRBs Deposits (cr) Loans & Advances (cr) CD ratio (%) Share of agri adv to total (%) Gross NPA (%) Net NPA % 2005-06 133 14489 617 111/22 71329 38520 55.7 54.2 5.2 2006-07 96 14563 625 81/15 83144 47326 58.3 56.6 6.55 3.46 2007-08 90 14790 1027 82/8 99093 57568 59.5 56.3 6.1 3.36 2008-09 86 15524 1335 80/6 120189 65609 56.4 55.1 4.2 1.81 2009-10 82 14575 1884 79/3 145035 79157 57.6 54.8 3.72 1.62 2010-11 82 16024 1785 75/7 166232 94715 59.51 55.7 3.75 2.05 2011-12 82 16914 1886 79/3 186336 113035 63.3 53 5.03 2.98 2012-13 64 17,867 2,384 63/1 2,11,457 1,33,098 66.13 63 5.65 3.40 PERFORMANCE OF RRBs Source: Reports on Trend and Progress Banking in India and NABARD
    • Agency 2008-09 2009-10 2010-11 2011-12 2012-13 45,966 63,497 78,007 87,963 1,11,203 26,765 35,217 44,293 54,450 63,681 2,28,951 2,85,800 3,45,877 3,68,616 4,32,491 3,01,908 3,84,514 4,68,291 5,11,029 6,07,375
    • Census 2001 Census 2011 Households Total number of households Number of households availing banking services Percent Total number of households Number of households availing banking services Percent Rural 138,271,559 41,639,949 30.1 167,826,730 91,369,805 54.4 Urban 53,692,376 26,590,693 49.5 78,865,937 53,444,983 67.8 Total 191,963,935 68,230,642 35.5 246,692,667 144,814,788 58.7 Source: Dept. of Financial Services Ministry of Finance, Government of India
    • Year No of Deposit A/C’s No of No Frill A/C’s No of Loan A/C’s GCC SHG KCC Tenant SSI/SCC/ Artisans/ Retails/T rader 2006-07 669.88 34.54 164.97 1.083 6.52 82.84 1.08 35.74 2007-08 758.02 81.17 171.20 2.35 7.20 93.14 1.03 33.53 2008-09 935.54 153.81 170.66 3.22 8.04 67.87 0.95 19.64 2009-10 1,002.16 200.09 186.67 4.12 8.97 83.72 0.83 21.28 2010-11 1,157.47 200.94 205.62 5.2 8.62 96.55 1.91 28.15 2011-12 2,358.67 208.94 219.84 5.9 8.82 97.22 1.82 29.12 Source: Central Statistical information Department, NABARD.
    • • August 1998 KCC emerged as a innovative credit mechanism • The co-operative banks and RRBs taken together had issued 453.10 lakh KCCs.
    • • No need to apply for a loan for every crop. • Reduces the interest burden from the farmer • Helps to buy on cash-avail discount from dealers. • Maximum credit limit based on agriculture income. • Repayment only after harvest.
    • • Introduced September 2003 • 86,741 lakh SCCs were issued with an aggregate credit limit of 359.67 crore. • 13.96 lakh SCCs were issued by RRBs and Co- operative institutions.
    • • Financing through SHGs reduces transaction costs • Bank has to handle only a single SHG account
    • • The Group should be in existence for at least six months. • The Group should have actively promoted the savings habit. • The Groups could be either formal (registered) or informal (unregistered). • Membership of the group could be between 10 to 20 persons.
    • Farmers Clubs are grassroots level informal forums. Such Clubs are organized by rural branches of banks with the support and financial assistance of NABARD for the mutual benefit of the banks and rural people.
    • • Farmers Club (FC) Programme was redesigned to be in line with „Farmer First‟ agenda in the development strategy. • The programme aims • Agency-wise RRBs promoted the maximum number of clubs (12,604), Commercial banks (8,471), co- operative banks (5,237) and other agencies (1,914).
    • • Increase in deposits. • Generation of new business avenues. • Increase in the recoveries and decline in the non- performing assets. • Reduction in the transaction costs of financial institutions/ Banks.
    • • RRBs will have a target of 60% of their outstanding advances for priority sector. • 25 % should be advanced to weaker sections of the society.
    • • Whole sale or retail traders, distributors, cooperative marketing societies • Cold storage plants. • Primary agricultural credit societies • Agro industry corporations and other public sector bodies for their agricultural development activities.
    • • Banks have been allowed to formulate their own models or choose any intermediary for extending micro credit. • They may choose suitable branches/ pockets/ areas where micro credit programmes can be implemented.
    • Chairman: Ashok Reddy Nukala No of District cover: 10 Malaprabha Grameena Bank, Bijapur Grameena Bank, Varada Grameena Bank and Netravathi Grameena Bank 12/09/2005
    • Particulars 31/03/2011 31/03/2012 No. of Branches. 451 500 No. of Staff 2271 2377 Total Deposits 5405.70 6186.50 Gross Advances 3640.81 4516.89 Advances to SC/ST Categories 436.25 563.22 Outstanding under Priority Sector Advance 3037.11 3842.25 Advance to Agriculture 2353.25 2916.22 Advance to Weaker Section Outstanding 1527.37 1895.51 Credit Disbursement 2177.84 2942.03 Credit Disbursement to Agriculture 1001.14 1533.59 NPA Outstanding 92.58 89.17 Total Income 574.96 745.81 Total Expenditure 446.78 581.62 profit 128.18 164.19 (Rs in Crores)
    • Schemes Purpose Eligibility Quantum VIKAS RAITA MITRA TRACTOR YOJANA Tractors, Trailers, Power Tillers, Implements, Second Hand Tractors All Farmers, as per NABARD guidelines. 80 to 90% of cost. VIKAS BHOOMI Purchase of Land for Agri- Purpose SF / MF /Tenant Farmers, Big Farmer. No margin up to Rs.50,000/-. 10 % Margin for loans above Rs.50,000/- Max- Purchase for 5 Acres of lands. VIKAS JALAVARDHINI Construction of water storing structures in Agri. Land SC /ST farmers Rs.30,700/- or Rs.34,200/- for 10 X10 X 3 Cu Mtr Model. Rs.26,800/- for 8 X 8 X3 Cu Mtr Model, Depending on Situation of Land VIKAS KISAN SAMRUDHI CREDIT CARD For production of crops and agri. Investment credit , repayable in 5 years. All Agriculturists As per Scale of Finance and NABARD Unit Cost VIKAS GRIHA Purchase of Plot & construction of house Salaried as well as all income earning group below 55 years of age 25 % for Plot with construction up to 40 % based on the age of the old house VIKAS AGRI-CLINIC / Agri- BUSINESS To set up Agri clinics / Agri business Centers Agri –graduates Individuals -Rs.10 lakhs, Group - Rs.50.00 lakhs, Source: Karnataka Vikas Grameen Bank
    • Sl.No Particulars Amount Rate of Interest(%) 1 KCC/CROP LOANS-Applicable rate of interest up to one year from the date of disbursement or due date or date of payment / renewal whichever is earlier a). Upto Rs. 3 lakhs b). Above Rs. 3 lakhs 7.00 14.25 2 Agri Term Loans, agriculture/allied activities including purchase of Agriculture land, commercial production of organic inputs) a) Up to Rs. 50,000/- b) Rs.50,000/- to 2.00 lakhs c) Above Rs.2,00,000/- 12.00 13.50 14.00 3 Purchase of 2/3/4 wheelers for agri purpose a. up to Rs. 50,000/- b. Rs. 50,000/- to 2.00 lakh c. Above Rs. 2,00,000 13.00 14.00 14.25 4 Small Scale Industries, Rural Artisans, Cottage Industries, Tertiary Sectors including loan to Retail Traders, Small Business and Other Self Employed, Professionals and Medical Practitioners/ Swarojagar Credit Card.Rural Godown,Cold storage,Other Non farm sectors a) Up to Rs. 50,000/- b) Rs.50,000/- to Rs.2,00,000/- c) Above Rs.2,00,000/- 13.00 13.50 14.00 5 Ware House Receipt Loans:(other than Produce Loan) a) Up to Rs. 50,000/-with repayment period of less than 6 months. b) Rs.50,000/- to Rs.1,00,000/- with repayment period of less than 6 months. 13.00 14.00 6 Jewel Loans / (VKCC JL) (Agriculture) with interest Subvention Up to Rs.3,00,000/- 7.00 7 Jewel Loans/ (Agriculture) Others Irrespective amount 13.50 Advances to Self Help Groups (Credit Linkage) a) Up to Rs.50,000/- b) Above Rs.50,000/- 12.50 14.00 8 Education Loans a) Up to Rs.4,00,000/- b) Above Rs.4,00,000/- 12.50 13.00 9 Tractor/ Trailors, agriculture Equipments Irrespective of loan amount 25% Margin 13.75 10 Rural Housing Loans/Public Housing loans and Farm House/House repairs up to 1.00 lakh in Rural/Semi Urban Areas & Up to Rs. 2.00 lakh in Urban area and Rural Sanitation Facility a) Up to Rs.2,00,000/- b) Rs.2,00,001/ toRs.5,00,000/- c)Rs.5,00,000/toRs.20,00,000/- 10.25 10.75 11.25 11 Loans under National Scheme for Rehabilitation of Scavengers a) Up to Rs.15000/- b) Above Rs.15000/- 4.00 10.00
    • 1
    • Sl. No Variables Before After Difference Percent change 1. Annual income (Rs.) 39986.10 69149.30 29163.10 72.94 2. Asset acquisition (Rs.) 10868.00 19069.40 8201.30 75.47 3. Consumption pattern (Rs.) 296.50 1329.80 1033.30 348.50 4. Land productivity (q/acre) a. Groundnut 8.518 5.12 3.39 39.86 b. Cotton 4.699 7.55 2.88 61.39 5. Cropping pattern 0.826 1.7976 0.9706 117.50 6. Employment generation (mandays) 65.48 107.98 42.49 64.89 n=144
    • Sl.no Grameena Bank Man Power No. of Branches Employees per branch Loans(no.of accounts) Loan account per branch Loan account per employee Deposit(no .of accounts) Deposit account per employee Deposit account per branch 1 Tungabhadra 0.43 -0.19 0.62 1.02 1.21 1.29 1.89 1.45 2.08 2 Malaprabha 0.59 0.23 0.36 1.32 1.08 0.95 0.28 -0.32 0.42 3 Cauvery 3.68 0.23 3.68 -1.39 -1.39 -5.14 -2.64 -6.10 -2.64 4 Krishna 1.84 0.43 1.40 2.77 2.33 1.26 8.08 6.13 7.62 5 Chitradurga 0.31 -0.32 0.63 -0.37 -0.05 -0.21 -2.46 -2.77 -2.15 6 Kalpataru 2.59 0.39 2.20 -0.34 -0.73 -2.76 0.19 3.51 5.78 7 Kolar 1.54 -0.15 1.69 -0.29 -0.14 -2.03 2.37 0.81 2.52 8 Bijapur 1.36 0.06 1.30 4.60 4.53 3.16 8.03 6.57 7.96 9 Chickmagalur- Kodagu 2.23 0.08 2.23 3.33 3.33 1.06 -2.48 -4.61 -2.48 10 Sahyadri 5.04 -0.35 5.41 -1.06 -0.71 -5.19 1.35 -3.51 1.71 11 Netravati 3.13 0.59 2.52 -2.39 -2.96 -5.65 8.14 4.87 7.51 12 Varada 1.64 1.68 -0.04 4.21 2.49 1.70 8.51 6.76 6.72 13 Visveshwaraya 4.29 0.13 4.29 3.45 3.45 -0.85 3.55 -0.71 3.55 KARNATAKA 1.32 0.10 1.22 0.99 0.89 -010 1.85 0.52 1.74
    • • To take banking to door steps of rural households particularly in banking deprived rural area. • To avail easy and cheaper credit to weaker rural section who are dependent on private lenders. • Encourage rural savings for productive activities and to generate employment in rural areas.