Regional Rural Banks (RRBs) are banks formed in collaboration by the Central Government, State Governments and Sponsoring Commercial Banks to give loans to rural areas.
Regional Rural Banks (RRBs) were set up as government-sponsored, regional based rural lending institutions under the Regional Rural Banks Act, 1976. RRBs were configured as hybrid micro banking institutions, combining the local orientation and small-scale lending culture of the cooperatives and the business culture of commercial banks. Their mission was to fulfill the credit needs of the relatively un-served sections in the rural areas -small and marginal farmers, agricultural labourers and socio-economically weaker sections.
Shareholding pattern of RRBs among the three sponsoring entities is 50:35:15 among central government, sponsoring bank and state government respectively.
At present, the number of RRBs is shrinking as part of the consolidation policy for RRBs.
