• RRBs are government-owned scheduled commercial banks of India that operate at the regional level in different states of India.
• They serve the country’s rural areas and provide them with basic banking and other financial-related services.
• Origin:
  • The Narasimham Committee on Rural Credit (1975) recommended the establishment of Regional Rural Banks (RRBs).
  • The establishment of RRBs finds its route in the ordinance passed on 26th September 1975 and the RRB Act 1976. 
  • Prathama Grameen Bank was the first RRB and was established on 2nd October 1975.
• Functions:
  • To provide basic banking facilities to rural and semi-urban areas.
  • To effect some governmental functions, such as the disbursal of wages under the MGNREGA policy.
  • To provide other bank-related facilities such as locker facility, internet banking, mobile banking, debit and credit cards, etc.
  • Grant credit facilities to people in rural areas, such as small farmers, artisans, small entrepreneurs, etc.
  • To accept deposits from people.
• Regulation: 
  • Regional Rural Banks are regulated by the RBI and supervised by the National Bank for Agriculture and Rural Development (NABARD).
• Ownership: 
  • RRBs are jointly owned by the Government of India (GOI), the Sponsor Bank and the concerned State Government with share proportions of 50%, 35% & 15%, respectively.
• Management: 
  • The Board of Directors manages the overall affairs of these banks, which consists of one Chairman, three Directors as nominated by the Central Government, a maximum of two Directors as nominated by the concerned State Government, and a maximum of three Directors as nominated by the Sponsor Bank.

Source: PIB