Union Territory of Puducherry to get a Regional Rural Bank

The Union Cabinet on 7th March 2008, approved release of 50% share of the Central Government i.e., Rs. 50 lakh towards contribution for the establishment of a Regional Rural Bank in the Union Territory of Puducherry (formerly Pondicherry) to be sponsored by Indian Bank.

This decision will assist in expanding the network of RRBs in uncovered areas. The Issued Capital of each stand-alone RRB is Rs. 1 crore and accordingly the proposed Issued Capital of the RRB to be established in UT of Puducherry be Rs. 1 crore.

The area of operation of a majority of the RRBs is limited to a notified area comprising a few districts in a State. As on 31.3.2006, RRBs are operating with a network of 14494 branches covering 525 districts out of 605 districts in the country in 26 States. As a result of amalgamation, 196 RRBs were reduced to 133 by way of amalgamation as on 31.3.2006.

Structure of Regional Rural Bank

RRBs are jointly owned by Government of India, the State Government concerned and the Sponsor Banks ( 27 Scheduled Commercial Banks and one State Cooperative Bank).

As per Section 6(1) of the RRB Act, 1976, the Issued Capital of each Regional Rural Bank shall, in the first instance, be such as may be fixed by the Central Government in this behalf, but it shall in no case be less than twenty-five lakh rupees or exceed one crore of rupees.

As per Section 6(2) of RRB Act, 1976 the issued capital of RRBs shall be subscribed by the Central Government, State Government and the Sponsor Banks in the proportion of 50%, 15% and 35% respectively.

Significant improvement in Regional Rural Banks (RRB's) Performance ... Click here

Application of Capital Adequacy Norms to RRBs... Click here


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