Why in news?

Several of RRB  are now facing an existential crisis due to dwindling business and soaring bad assets.

Highlights:

• Scope of their survival is diminishing. Even as the overall business of rural financial institutions has generally been looking up, they are struggling to scale up business volumes

Regional Rural Banks (RRBs)

• They are government owned scheduled commercial banks of India that operate at regional level in different states of India.
• Ownership : Ministry of Finance , Government of India.
• Establishment: Recommendations of the Narsimhan Committee on Rural Credit, during the tenure of Indira Gandhi’s government.
• They were created to serve rural areas with basic banking and financial services. However, RRBs also have urban branches.
• Area of operation : It is limited to the area notified by the government of India covering, and it covers one or more districts in the State.
• Functions : RRBs perform various functions such as providing banking facilities to rural and semi-urban areas, carrying out government operations like disbursement of wages of MGNREGA workers and distribution of pensions, providing para-banking facilities like locker facilities, debit and credit cards, mobile banking, internet banking, and UPI services
• Owner : Government of India (50%),Nationalised Banks (35%),State Governments (15%)

• Purpose : Include rural areas into the economic mainstream since around 70% of the Indian population was rural.