Why in the news?

  •  The Finance Ministry unveiled a new logo for Regional Rural Banks (RRBs) to signify a single and unified brand identity. 

Regional Rural Banks (RRBs)

  • Objectives
    • Their mission is to fulfill the credit needs of the relatively unserved sections in rural areas like small and marginal farmers, agricultural laborers, and socio-economically weaker sections.
    • The RRBs mobilize financial resources from rural / semi-urban areas and grant loans and advances mostly to small and marginal farmers, agricultural laborers, and rural artisans.
  • Functions:
    • Providing banking facilities to rural and semi-urban areas.
    • Carrying out government operations like the disbursement of wages of MGNREGA workers, distribution of pension, etc.
    • Providing Para-Banking facilities like locker facilities, debit and credit cards, mobile banking, internet banking, UPI etc.
  • Ownership: The shareholding pattern of RRBs among the three sponsoring entities is 50:35:15 among the central government, sponsoring bank, and state government, respectively. 
  • Regulation: Regional Rural Banks are regulated by the RBI and supervised by the National Bank for Agriculture and Rural Development (NABARD).
  • Priority Sector Lending: The RBI has set a Priority Sector Lending (PSL) target of 75% of total outstanding advances for RRBs as against 40% for Scheduled Commercial Banks.
  • Sources of Funds: It comprises owned funds, deposits, borrowings from NABARD, Sponsor Banks and other sources, including SIDBI and the National Housing Bank.

Source: The Hindu