The Full Form of ‘RRB’ in Banking is ‘Regional Rural Bank’.
Full Form of RRB
The full form of ‘RRB’ in banking is ‘Regional Rural Bank’. This type of bank was established under the regional rural bank act of 1976, with the purpose of providing credit to rural and agricultural areas. The banks are owned by the central government, state government and a sponsor bank, who together provide capital to the regional rural banks.
The main objective of a regional rural bank is to promote economic development in rural and backward areas by providing financial services to farmers and other small businesses. These services include loan disbursement, acceptance of deposits, providing various types of insurance services, helping in the transfer of funds between customers, etc.
A regional rural bank ensures that resources are available for people living in remote or unserviced localities. It also provides employment opportunities for locals and supports local businesses. As these banks are spread across different states, they help bring about an equitable distribution of resources among different sections of society.
Unlike commercial banks which require high capitalization and are subject to stringent regulatory norms, RRBs are subject to less stringent regulations as they have limited operations with minimal assets and liabilities. However, like all other banks, RRBs must adhere to prudential guidelines issued by the RBI such as maintaining a minimum CRAR (Capital-to-Risk weighted Assets Ratio) ratio and adequate provisioning against bad loans.
In order to ensure proper management at RRBs, RBI monitors their performance on regular basis through inspection reports prepared by its field staffs located across India. This helps them identify any irregularities or violations that may be taking place within the bank’s activities which can then be addressed accordingly.
Apart from providing banking services, many RRBs also provide micro-credit facilities for women entrepreneurs which includes loans for setting up small enterprises like sewing machines etc., at very low interest rate with flexible repayment options. This helps them become independent financially while also enabling them to improve their standard of living.
Overall, Regional Rural Banks have played an important role in promoting economic growth in rural areas while ensuring financial inclusion among those who lack access to banking services due to geographical constraints or any other reasons. Thus they have helped millions of people get access to basic banking facilities while contributing significantly towards national development as well.
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