10. 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
11.
12.
13.
14. • 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.”
15. 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.
17. • 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
18. • 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
19. • 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.
20. • 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. 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
22. 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
23. 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
24. 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
28. 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
29.
30. 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.
31.
32. • August 1998 KCC emerged as a innovative credit
mechanism
• The co-operative banks and RRBs taken together had
issued 453.10 lakh KCCs.
33. • 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.
34. • 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.
35. • Financing through SHGs reduces transaction costs
• Bank has to handle only a single SHG account
36. • 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.
37. 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.
38. • 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).
39. • 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.
40. • RRBs will have a target of 60% of their outstanding
advances for priority sector.
• 25 % should be advanced to weaker sections of the
society.
41. • 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.
42. • 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.
43. 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
44. 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)
45. 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
46. 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
52. • 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.
