List of RRB (Regional Rural Banks) In India in detail

List of RRB (Regional Rural Banks) In India

Regional Rural Banks in India Were Established In 1975 With The Recommendations of “The Narshimham Committee” Under RRB ACT 1976. The Major Challenges to Regional Rural Banks ( RRBs) Is to Provide Basic Banking Services to Rural and Sub Urban areas of Various States of India, But RRBs In India Can Expand Their Operations In Urban Areas Too.

Genesis of Regional Rural Banks

Regional Rural Banks came into existence on Gandhi Jayanti in 1975 with the formation of a Prathama Grameen Bank. The rural banks had the legislative backing of the Regional Rural Banks Act 1976 . This act allowed the government to set up banks from time to time wherever it considered necessary.

The RRBs were owned by three entities with their respective shares as follows:

  • Central Government → 50%
  • State government → 15%
  • Sponsor bank → 35%

Regional Rural Banks were conceived as low cost institutions having a rural ethos, local feel and pro poor focus. Every bank was to be sponsored by a “Public Sector Bank”, however, they were planned as the self sustaining credit institution which were able to refinance their internal resources in themselves and were excepted from the statutory pre-emptions.

Problems with Regional Rural Banks

But the original assumptions were belied as within a very short time, most banks were making losses. The RRB concept was based upon the policy that they would lend only to the weaker sections of rural society, charging lower interest rates, opening branches in remote and rural areas and keep a low cost profile. But the commercial motivation was absent.

Initially the banks expanded and by the end of year 1985 RRBS had opened 12606 branches. During this period their credit deposit Ratio (C.D.R) expanded very fast. In 1976 it was 165% and gradually declined to 104 % in December 1986. The Credit Deposit Ratio continuously declined thereafter.

Later, the questions started being raised about the viability of these banks. The Khusrau Committee of 1989, noted that the weaknesses of RRBs are endemic to the system and non-viability is built into it, and the only option was to merge the RRBs with the sponsor banks. The objective of serving the weaker sections effectively could be achieved only by self-sustaining credit institutions. RRBs were finding themselves unable to sustain because of the mounting losses due to imprudent commercial policy. Thus, Khusrau Committee (aka Agricultural Credit Review Committee) said that the RRBs have no justifiable cause for continuance and recommended their mergers with sponsor banks.

But by that time, the branch network had expanded so large that it would be political unwise for the government to merge the RRBs with sponsor Banks.

Recommendations of Narsimham Committee on RRBs

The Narsimham Committee in 1990s also reiterated that the RRBs should be merged with the sponsor banks. By 1993, 172 of the 196 RRBs were recorded unprofitable. The paid up capital which was ` 25 Lakh at that time was not able to absorb the loan losses of most of the RRBs. The loan recovery was around 40%. The First Narasimham Committee recommended that the RRBs should also be permitted to engage in all types of banking business and should not be forced to restrict their operations to the target groups. The Narasimham committee also recommended that there should be mergers of the RRBs with their sponsor bank, BUT the “sponsor banks might decide whether to retain the identities of sponsored RRBs or to merge them with rural subsidiaries of commercial banks to be set up on the recommendation of the committee”. The first recommendation of letting the RRBs do all businesses was accepted by the government.

Some measures were taken by the Reserve Bank of India also. It allowed the RRBs to relocate their branches if they were making losses at one location for more than 3 years. They were also allowed to finance the non-target groups to the extent not exceeding 40 percent of their incremental lending. This limit was subsequently enhanced to 60 percent in 1994. As a result, the RRBs diversified into a range of non-priority sector (NPS) advances, including jewel and deposit-linked loans, consumer loans and home loans

Some efforts were done by NABARD with funding support of the Swiss Development Corporation (SDC). It took a number of HR and Organizational Development in these banks.

Turnaround of RRBs

The above discussion makes it clear that most RRB were making loss and had deviated from the original idea that had created them. But there were some profit making RRBs also. Some reforms led the rise in the number of the profit making RRBs but most of them were having a low credit deposit ratio. This was coupled with the decreasing percentage of loans to small and marginal farmers out of the total loans disbursed by the RRBs. The RRBs NPA level was high. In the early 2000s there was no prescribed CRAR (capital to risk weighted asset ratio) for the RRBs. In 2005, based upon the recommendation of an internal working group the RRBs were asked to maintain a capital to risk weighted asset ratio at 5% and over the period of time they were expected to align themselves to Basel I standards. However, the major reform was to merge the RRBs with the sponsor banks.

There were 196 RRBs sponsored by 27 SCBs and one State Cooperative Bank were operating in the country with a network of 14,484 branches spread over 523 districts as on March 31, 2005. The government started the process of consolidation and amalgamation in 2005, bringing the number down to 82 in 2010.

As of March-end, 2011, the total number of RRBs stood at 82. This number fell to 64 in March 2013. As of March 2014, the number of RRBs has been reduced to 57. After the 2014 elections, the new NDA government has put hold on further amalgamation of the Regional Rural Banks. The focus of the new government is to improve their performance and exploring new avenues of investments in the same. Currently, there is a bill pending to amend the RRB Act which aims at increasing the pool of investors to tap capital for RRBs.

Regulation of RRBs

Regional Rural Banks are regulated by National Bank for Agriculture and Rural Development (NABARD). Please note that currently seven states viz. Tripura, Nagaland, Manipur, Mizoram, Arunachal Pradesh Meghalaya and Puducherry, have state-level RRBs. Gujarat and Karnataka too have demanded formation of state level RRB. In case of West Bengal, the state Assembly took unanimous resolution in favour of State level RRB in the year 2004.

List of RRBs Functioning in the Country

Sr. No.Name of Regional Rural Bank & Website LinkSponsor BankState
1Allahabad UP Gramin BankAllahabad BankUttar Pradesh
2Andhra Pradesh Grameena
Vikas Bank
State Bank of IndiaAndhra Pradesh
3Andhra Pragathi Grameena BankSyndicate BankAndhra Pradesh
4Arunachal Pradesh Rural BankState Bank of IndiaArunachal Pradesh
5Assam Gramin Vikash BankUnited Bank of IndiaAssam
6Bangiya Gramin Vikash BankUnited Bank of IndiaWest Bengal
7Baroda Gujarat Gramin BankBank of BarodaGujarat
8Baroda Rajasthan Kshetriya Gramin BankBank of BarodaRajasthan
9Baroda UP Gramin
Bank
Bank of BarodaUttar Pradesh
10Bihar Gramin BankUCO BankBihar
11Central Madhya Pradesh
Gramin Bank
Central Bank of IndiaMadhya Pradesh
12Chaitanya Godavari Grameena BankAndhra BankAndhra Pradesh
13Chhattisgarh Rajya Gramin BankState Bank of IndiaChhattisgarh
14Dena Gujarat Gramin BankDena BankGujarat
15Ellaquai Dehati BankState Bank of IndiaJammu & Kashmir
16Gramin Bank of AryavartBank of IndiaUttar Pradesh
17Himachal Pradesh Gramin BankPunjab National BankHimachal Pradesh
18J&K Grameen BankJ&K Bank Ltd.Jammu & Kashmir
19Jharkhand Gramin BankBank of IndiaJharkhand
20Karnataka Vikas Grameena BankSyndicate BankKarnataka
21Kashi Gomti Samyut Gramin BankUnion Bank of IndiaUttar Pradesh
22Kaveri Grameena BankState Bank of IndiaKarnataka
23Kerala Gramin BankCanara BankKerala
24Langpi Dehangi Rural BankState Bank of IndiaAssam
25Madhyanchal Gramin BankState Bank of IndiaMadhya Pradesh
26Madhya Bihar Gramin BankPunjab National BankBihar
27Maharashtra Gramin BankBank of MaharashtraMaharashtra
28Malwa Gramin BankState Bank of IndiaPunjab
29Manipur Rural BankUnited Bank of IndiaManipur
30Meghalaya Rural BankState Bank of IndiaMeghalaya
31Mizoram Rural BankState Bank of IndiaMizoram
32Nagaland Rural BankState Bank of IndiaNagaland
33Narmada Jhabua Gramin BankBank of IndiaMadhya Pradesh
34Odisha Gramya BankIndian Overseas BankOdisha
35Pallavan Grama
Bank
Indian BankTamil Nadu
36Pandyan Grama BankIndian Overseas BankTamil Nadu
37Paschim Banga Gramin BankUCO BankWest Bengal
38Pragathi Krishna Gramin
Bank
Canara BankKarnataka
39Prathama BankSyndicate BankUttar Pradesh
40Puduvai Bharthiar
Grama Bank
Indian BankPuducherry
41Punjab Gramin BankPunjab National BankPunjab
42Purvanchal BankState Bank of IndiaUttar Pradesh
43Rajasthan Marudhara Gramin BankState Bank of IndiaRajasthan
44Saptagiri Grameena
Bank
Indian BankAndhra Pradesh
45Sarva Haryana Gramin BankPunjab National BankHaryana
46Sarva UP Gramin BankPunjab National BankUttar Pradesh
47Saurashtra Gramin BankState Bank of IndiaGujarat
48Sutlej Gramin BankPunjab and Sind BankPunjab
49Telangana Grameena BankState Bank of IndiaTelangana
50Tripura
Gramin Bank
United Bank of IndiaTripura
51Utkal
Grameen Bank
State Bank of IndiaOdisha
52Uttar Banga Kshetriya Gramin BankCentral Bank of IndiaWest Bengal
53Uttar Bihar Gramin BankCentral Bank of IndiaBihar
54Uttarakhand Gramin
Bank
State Bank of IndiaUttarakhand
55Vananchal Gramin BankState Bank of IndiaJharkhand
56Vidharbha Konkan Gramin BankBank of IndiaMaharashtra

1 COMMENT

  1. Please check the TamilNadu grama bank, they merged that 2 banks into 1 bank. In TamilNadu, its called Tamilnadu Grama Bank and sponsored by an Indian bank

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