I explained What is rural development bank? Major kinds, current status of rural development bank, objectives and functions of Rural development bank, major problem of Rural development bank

1. RURAL
DEVELOPMENT
BANK
By,
Saravanan,
Elayaraja,
Sethu,
Mariappan.

2. Introduction
● Rural development banking in india started since the establishment of Banking
sector in India,
● In rural Bank in india, there are 14,475 rural banks in the country of which 2126
are located in remote rural areas.
● SBI - Largest bank catering to rural banking,
● Haryana state Cooperative apex bank Ltd,NABARD, United bank of india are
some of the other banks operating in rural development .

3. Current status
● Rural population of about 780 million with
limited access to financial services,
● Rural economy constitute about 50% of GDP,
● Current demand for credit in rural India is about
₹133,000 crs,
● Commercial banks branches cover only 7% of
rural sector and large market is still untapped.

4. Major types of Rural
development bank
● Cooperative bank,
● NABARD,
● RRB.

5. Explanation
Cooperative bank:
Cooperative bank is a association of person for volunteering cooperative for their mutual,
social, cultural and economic benefits.
NABARD:
National Bank for Agriculture and Rural Development (NABARD) is an apex regulatory body for
overall regulation of regional rural banks and apex cooperative banks in India. It is under the
jurisdiction of Ministry of Finance , Government of India.
RRB:
Regional Rural Banks are government owned scheduled commercial banks of India that operate
at regional level in different states of India. These banks are under the ownership of Ministry of
Finance, Government of India. They were created to serve rural areas with basic banking and
financial services.

6. Objectives of Rural development bank
● Opening branches of banks in the rural areas
● Providing loans for the development of the agricultural sector
to small farmers, agricultural laborers, small entrepreneurs,
etc.
● Generating employment opportunities
● Encouraging savings among the rural people, accepting
deposits, and using the funds for productive purposes
● Protecting common people from money lenders’ exploitation
● Reducing the cost of providing loans in rural areas

7. Functions of Rural development bank
● Accepting deposits from members in current or savings accounts. They can also be
made in fixed or recurring deposits.
● Extending loans to the small and marginal farmers, craftsmen and artisans, medium
and small scale enterprises, housing, local traders, renewable energy, etc. that need
development and financial assistance.
● Disbursing wages is an important RRB function under the Mahatma Gandhi National
Rural Employment Guarantee Act (MGNREGA) and the Pradhan Mantri Gram Sadak
Yojana (PMGSY). It also disburses pensions under the poverty alleviation schemes.
● Secondary functions
● Providing agency services and general utility services to the customers
● Assisting in foreign exchange, money wire transfer, bill payments, etc
● Utility services like the ATM, issuance of debit cards, locker facilities, UPI, etc.

8. List of scheduled Regional Rural Bank
1. Andhra Pragathi Grameena Bank
2 Chaitanya Godavari Grameena Bank
3. Saptagiri Grameena Bank
4. Andhra Pradesh Grameena Vikas Bank
5. Telangana Grameena Bank
6. Arunachal Pradesh Rural Bank
7. Uttar Bihar Gramin Bank
8. Chhattisgarh Rajya Gramin Bank
9. Saurashtra Gramin Bank
11. Himachal Pradesh Gramin Bank
12. Ellaquai Dehati Bank
13. J&K Grameen Bank
14. Karnataka Vikas Grameena Bank
15. Madhyanchal Gramin Bank
16. Vidharbha Konkan Gramin Bank
17. Maharashtra Gramin Bank
18. Manipur Rural Bank
19. Meghalaya Rural Bank
20. Mizoram Rural Bank
21. Nagaland Rural Bank

9. 22. Utkal Grameen bank
23. Odisha Gramya Bank
24. Puduvai Bharathiar Grama Bank
25. Baroda Rajasthan Kshetriya Gramin
Bank
26. Rajasthan Marudhara Gramin Bank
27. Tripura Gramin Bank
28. Uttarakhand Gramin Bank
29. Bangiya Gramin Vikas Bank
30. Paschim Banga Gramin Bank
31. Uttarbanga Kshetriya Gramin Bank
32. Kerala Gramin Bank
33. Assam Gramin Vikash Bank
34. Baroda Gujarat Gramin Bank
35. Dakshin Bihar Gramin Bank
36. Punjab Gramin Bank
37. Jharkhand Rajya Gramin Bank
38. Karnataka Gramin Bank
39. Madhya Pradesh Gramin Bank
40. Tamil Nadu Grama Bank
41. Aryavart Bank
42. Prathama UP Gramin Bank
43. Baroda UP Bank*

10. Major problems faced by Rural Development
bank
1. Organizational Problems
A commercial bank sponsors each RRB. The concerned State government and Central Government
also contribute to its capital. Therefore there is a multi - agency control of RRBs. This has led a lack
of uniformity in their performance.
2. Lack of coordination:
Lack of coordination between the RRB and sports or bank regarding branch expansion, policy
making etc., are also the important causes for the slow progress of Regional Rural Bank.
3. Difficult in deposit mobilization:
The RRB are aiming at catering to the needs of poor and are not serving the needs of the rich. So,
the Regional Rural Bank are not able to attract the deposit from the potential sector.

11. 4. Poor recovery rate: The recovery performance of the
Regional Rural Bank is not up to the mark. The late of
recovery respect of many RRB is around 55 percent only,
5.Capital inadequacy: The Capital inadequacy is the very
basic to financial soundness. There is capital inadequacy
in Regional Rural Bank as most of the Regional Rural Bank
have huge losses in their Balance sheet Eating away all the
capital of Regional Rural Bank.