INTRODUCTION
The Regional Rural Banks were built up on the suggestions of Narsimha Committee on Rural Credit. The panel was of the view that RRBs would be greatly improved fit than the business banks or Co-Operative Banks in gathering the necessities of rustic regions. Considering the proposals of the board of trustees the Government of India passed Regional Rural Banks Act 1976. In the wake of passing the Act inside a year at any rate 25 RRBs were set up in various pieces of IndiaThe Regional Rural Banks were built up so as to grow such kind of banking foundations which could work as a business association in rustic territories.The Regional Rural Banks Act 1976 accommodate consolidation, guideline and ending up Regional Rural Banks with the end goal of building up the rustic economy by accommodating the motivation behind advancement of Agriculture, Trade, Commerce, Industry and other gainful exercises in the provincial regions, credit and different offices, especially to the little and minor ranchers, Agricultural Laborers, Artisans and little business visionaries and for issues associated therewith and people thereto.
The RBBs Act has made different arrangements in regards to the joining, guideline and working of RRBs. As per this Act, the RRBs are to be set-up basically so as to create rustic economy by giving credit offices to the motivation behind advancement of horticulture, exchange, business, industry and other gainful exercises in the provincial zones.
Such office is given especially to the little and peripheral ranchers, rural workers, craftsmans, and little business visionaries and for other related issues.
The destinations of RRBs can be abridged as pursues:
(I) To give shoddy and liberal credit offices to little and minor ranchers, agriculture workers, craftsmans, little business visionaries and other more fragile segments.
(ii) To spare the country poor from the moneylenders.
(iii) To go about as an impetus component and consequently quicken the monetary development in the specific area.
(iv) To develop the financial propensities among the country individuals and prepare investment funds for the monetary advancement of provincial regions.
(v) To expand work openings by empowering exchange and business in provincial territories.
(vi) To energize business in country territories.
(vii) To take into account the requirements of the regressive territories which are not secured by different endeavors of the Government.
(viii) To create immature areas and in this manner endeavor to evacuate monetary disparity between locales.
PROBLEMS
1.Slow progress
The RRBs’ pace of development in advance business is moderate. For this the accompanying reasons might be given: (I) There have been constrained extension for direct loaning by RRBs in their fields of tasks; (ii) It is constantly hard to distinguish the potential little borrowers and the bank staff have been required to attempt uncommon and true endeavors in such manner; (iii) Most of the little borrowers don’t care for the bank customs and want to obtain from the casual/indigenous wellsprings of fund, for example, moneylenders; (iv) The peculiarities in the Differential Interest Rate (DIR) Scheme likewise represented an extraordinary issue to the RRBs. While the RRBs charge 14 percent premium, the business banks charge just 4 percent under the DIR Scheme in provincial territories.
Subsequently, no borrower would go to RRBs or co-employable social orders in the zone when an advance from the business bank is accessible under the DIR Scheme; (v) There is no powerful connection between the RRBs and PACS and the ranchers’ administration social orders; (vi) There is absence of co-appointment between authorities of the area credit arranging panels and the RRBs.
2.Delay in decision making
The RRBs are controlled legitimately and in a roundabout way by different organizations, i.e., the supporting bank, NABARD, RBI, other than Central Government. Therefore, it sets aside long effort to take choices on some significant issues. This, thus influences the advancement of RRBs. Be that as it may, since end 1997, the operational obligation of RRBs has been passed on to support bank.
The RRBs pursue the techniques of the booked business banks in the matter of stores and propelling advances which are exceptionally entangled and tedious from the townspeople’s perspective. The country borrowers dependably acknowledge casual ways and straightforward systems as have been trailed by the cash loan specialists and the indigenous financiers.
3.Lack of co-ordination
By and large the staff of RRBs is urban-arranged and they may not know the issues and states of country territories. Absence of preparing office concerning these regions likewise influences the development of RRBs.
Scurry in branch extension program much of the time has brought about imbalance because of absence of co-appointment. In a few cases, it couldn’t be guaranteed that the parts of the RRBs are opened at focuses where no business or co-usable financial offices were given.
4.Difficulties in deposit mobalization
The RRBs experienced various pragmatic troubles in store preparation. By virtue of their prohibitive loaning arrangement which avoids more extravagant segments of the town society, these potential investors show least enthusiasm for keeping their cash with these banks.
The RRBs reject the more extravagant areas of the town society in giving direct money related help. These areas have potential investment funds to store. In any case, they are least keen on keeping them with the RRBs in perspective on the prohibitive credit strategy of these banks. Further, state and nearby governments and their offices additionally have not co-worked much by keeping up their store accounts with the RRBs.
SOLUTIONS
In step with RBI to implement 100% core banking solution(CBS) by September 2011 , United banks of india (UBI)-sponsored regional rural banks in four states have started working on their IT-system on a warfooting.
Even though late-starters, banks like Bangiya Gramin Vikas Bank in West Bengal, Assam Gramin Vikas Bank, Tripura Gramin Bank and Manipur Rural Bank are currently going to connect with a framework integrator as a stage towards grasping CBS.State Bank of India, Punjab National Bank and Union Bank of India have finished CBS execution in their separate RRBs.In the event of UBI-supported banks, Ernst and Young (E&Y) is helping the four banks in taking off CBS branches. Despite the fact that UBI has guided these banks in picking E&Y as expert, the RRBs are sharing the expense for drawing in the advisor. E&Y has drafted an IT strategy for them and helped coast a delicate for connecting with a frameworks integrator, which will give equipment and programming backing to RRBs.
As per Bangiya Gramin Vikas Bank executive Samar Sengupta, if all goes well, his bank will begin rolling our CBS branches from December this year.In the mean time, a high ranking representative at Uttar Banga Gramin Bank, which is under Central Bank of India, said the bank is hoping to bring 40% of its 119-odd branches under CBS overlay by March 2010.
National Bank will hold a gathering of the eight RRBs that it supported on August 19 on the advancement of CBS-plan. Strangely, Mumbai-based Central Bank of India has consented to share its server farm with its eight RRBs. RRBs, which were slow pokes in grasping present day banking innovation, would need to move quick on the IT front to make ready for their physical extension. Else, they will be unfit to extend their physical netwrok since the financial controller has banished them from opening branches without CBS offices after September this year. RBI has likewise advised open area banks to check out controlling their supported RRBs in IT upgradation attempt.
REFERENCES
S. C. (Ed.). (n.d.). 6 Major Problems faced by Regional Rural Banks of India. Retrieved from http://www.yourarticlelibrary.com/banking/6-major-problems-faced-by-regional-rural-banks-of-india/26344
N. S. (Ed.). (n.d.). 9 Difficulties Faced By Regional Rural Banks. Retrieved from http://www.preservearticles.com/banking/9-difficulties-faced-by-regional-rural-banks/26879
REGIONAL RURAL BANKS 