Question

Which of the following was the first Regional Rural Bank of India?

• A. Utkarsh Bank
• B. Vishwas Bank
• C. Pratham Bank
• D. Bandhan Bank

Answer 1

Answer:

C. Pratham Bank

Regional Rural Banks (RRBs) in India

Establishment of RRBs

• The first Regional Rural Bank (RRB) in India, Pratham Bank, was established on October 2, 1975.
• It was set up by the Syndicate Bank, a nationalized bank, in Moradabad, Uttar Pradesh.
• The establishment of RRBs was a significant step in the Indian banking sector, aimed at expanding the reach of institutional credit to the rural and semi-urban areas.

Background and Objectives

• RRBs were recommended by the Narasimham Committee (1975) to address the credit needs of the rural poor, who were often underserved by commercial banks.
• The primary objective was to provide access to affordable credit and banking services to farmers, small entrepreneurs, and artisans in rural areas.
• RRBs are jointly owned by the Government of India (50%), the concerned State Government (15%), and a sponsor bank (35%).

Key Features of RRBs

• They operate in specific rural or semi-urban areas and focus on lending to priority sectors like agriculture, small-scale industries, and handicrafts.
• RRBs offer various banking services, including savings accounts, term deposits, loans, and remittances.
• Over the years, RRBs have played a crucial role in financial inclusion and rural development in India.

Evolution and Reforms

• The Banking Regulation Act, 1949 was amended to include RRBs under its purview.
• Various reforms have been undertaken to improve the operational efficiency and financial health of RRBs, including amalgamation and consolidation.
• As of March 2023, there were 43 RRBs operating in India, serving millions of customers across the country.