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The Regional Rural Banks were established on the recommendations of the ______ on Rural Credit.
- a)Rekhi Committee
- b)Narsimha Committee
- c)Kelkar Committee
- d)Tandon Committee
- e)None of these
Correct answer is option 'B'. Can you explain this answer?
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The Regional Rural Banks were established on the recommendations of th...
The correct answer is option 'B', Narsimha Committee.
The Regional Rural Banks (RRBs) were established on the recommendations of the Narsimha Committee on Rural Credit. The Narsimha Committee, also known as the Committee on Financial System (CFS), was constituted in 1991 with the aim of examining the financial system in India and suggesting reforms to strengthen it.
The committee was headed by M. Narasimham, a former Governor of the Reserve Bank of India (RBI), and it submitted its report in 1991. The report made several recommendations, one of which was the establishment of RRBs to enhance the flow of credit to rural areas and promote rural development.
Here is a detailed explanation of the establishment of Regional Rural Banks:
1. Background:
- Prior to the establishment of RRBs, the rural credit system in India was dominated by cooperatives and commercial banks.
- However, these institutions were unable to effectively cater to the credit needs of the rural population due to various reasons such as lack of infrastructure, limited resources, and inadequate understanding of local needs.
- In order to bridge this gap and ensure adequate credit flow to the rural areas, the Narsimha Committee recommended the establishment of RRBs.
2. Objectives of RRBs:
- RRBs were primarily established to provide banking and financial services in rural and semi-urban areas.
- The main objective was to provide credit to small and marginal farmers, agricultural laborers, artisans, and small entrepreneurs in the rural areas.
- RRBs were also expected to mobilize deposits from rural areas and promote rural savings.
3. Structure and Governance:
- RRBs were set up as scheduled commercial banks under the Regional Rural Banks Act, 1976.
- The ownership of RRBs was shared by the Central Government, the concerned State Government, and the sponsor bank (usually a nationalized bank).
- The governance and management of RRBs were entrusted to a Board of Directors, which consisted of representatives from the Central Government, State Government, RBI, and the sponsor bank.
4. Functions and Operations:
- RRBs were authorized to carry out a wide range of banking activities, including accepting deposits, providing loans, and offering other financial services.
- They were intended to operate at the grassroots level and cater to the specific needs of the rural population.
- RRBs played a crucial role in channelizing institutional credit to the rural areas and supporting rural development programs.
In summary, the Narsimha Committee recommended the establishment of Regional Rural Banks to improve the flow of credit to rural areas and promote rural development. RRBs were intended to provide banking and financial services in rural and semi-urban areas, with a focus on small and marginal farmers, agricultural laborers, artisans, and small entrepreneurs.
The Regional Rural Banks (RRBs) were established on the recommendations of the Narsimha Committee on Rural Credit. The Narsimha Committee, also known as the Committee on Financial System (CFS), was constituted in 1991 with the aim of examining the financial system in India and suggesting reforms to strengthen it.
The committee was headed by M. Narasimham, a former Governor of the Reserve Bank of India (RBI), and it submitted its report in 1991. The report made several recommendations, one of which was the establishment of RRBs to enhance the flow of credit to rural areas and promote rural development.
Here is a detailed explanation of the establishment of Regional Rural Banks:
1. Background:
- Prior to the establishment of RRBs, the rural credit system in India was dominated by cooperatives and commercial banks.
- However, these institutions were unable to effectively cater to the credit needs of the rural population due to various reasons such as lack of infrastructure, limited resources, and inadequate understanding of local needs.
- In order to bridge this gap and ensure adequate credit flow to the rural areas, the Narsimha Committee recommended the establishment of RRBs.
2. Objectives of RRBs:
- RRBs were primarily established to provide banking and financial services in rural and semi-urban areas.
- The main objective was to provide credit to small and marginal farmers, agricultural laborers, artisans, and small entrepreneurs in the rural areas.
- RRBs were also expected to mobilize deposits from rural areas and promote rural savings.
3. Structure and Governance:
- RRBs were set up as scheduled commercial banks under the Regional Rural Banks Act, 1976.
- The ownership of RRBs was shared by the Central Government, the concerned State Government, and the sponsor bank (usually a nationalized bank).
- The governance and management of RRBs were entrusted to a Board of Directors, which consisted of representatives from the Central Government, State Government, RBI, and the sponsor bank.
4. Functions and Operations:
- RRBs were authorized to carry out a wide range of banking activities, including accepting deposits, providing loans, and offering other financial services.
- They were intended to operate at the grassroots level and cater to the specific needs of the rural population.
- RRBs played a crucial role in channelizing institutional credit to the rural areas and supporting rural development programs.
In summary, the Narsimha Committee recommended the establishment of Regional Rural Banks to improve the flow of credit to rural areas and promote rural development. RRBs were intended to provide banking and financial services in rural and semi-urban areas, with a focus on small and marginal farmers, agricultural laborers, artisans, and small entrepreneurs.
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The Regional Rural Banks were established on the recommendations of th...
Key Points
- The Regional Rural Banks were established on the recommendations of the Narsimha Committee Rural Credit.
- Regional Rural Bank:
- Regional Rural Banks were established on the basis of the recommendations of the Narasimham Working Group (1975), and after the legislation of the Regional Rural Banks Act, 1976.
- They are financial institutions that ensure adequate credit for agriculture and other rural sectors.
- They were set up on the recommendations of the Narasimham Working Group (1975).
- RRBs were granted legal provisions under the Regional Rural Banks Act, 1976.
- The first Regional Rural Bank "Prathama Grameen Bank" was set up on 2nd October 1975.
- The equity of a regional rural bank is held by the Central Government, the concerned State Government, and the Sponsor Bank in the proportion of 50:15:35.
- The RRBs have combined characteristics of a cooperative and a commercial bank.
- It operates within the local limits as notified by the Government.
- The main objectives of RRBs are:
- To provide credit and other facilities to the small and marginal farmers, agricultural labourers, artisans, and small entrepreneurs in rural areas.
- To check the outflow of rural deposits to urban areas.
- To reduce regional imbalances.
- To increase rural employment generation.
- They are required to provide 75% of their total credit as priority sector lending.
Additional Information
- Rekhi Committee on Indirect Tax Reform:-
- The Rekhi Committee was constituted in 1992 under the chairmanship of K.L. Rekhi. The recommendations are a Tribunal should be set up to deal with problems between taxpayers and tax collectors.
- A High-Level India classification committee with trade and industry representatives should be set up.
- Important consignments should be cleared within 3 days.
- The monopoly of one nominated bank in each state should be supplemented by another bank.
- Coercive measures must not be used for recovery of disputed duty amount when the assessee files a stay application.
- Kelkar Committee Report on Tax Reforms:-
- A task force on Direct and Indirect Taxes was constituted under the chairmanship of DR. Vijay Kelkar in 2002. The recommendation of the Vijay Kelkar committee are:
- The income tax exemption limit must be increased to Rs. 1 Lakh from the present 50,000 tax exemption limit for senior citizens and widows should be Rs. 1.5 lakhs.
- There should be a two-tier income tax structure with a 20% tax for earnings of Rs. 1 lakh to 4 lakh and 30% tax for over Rs. 4 lakhs. The standard deduction must be abolished but suggested an exemption for conveyance
allowance. - There should be the abolition of long-term capital gains tax, dividend tax, and wealth tax. There should not be any surcharge on income tax.
- There should be an interest subsidy of 2% for housing loans up to Rs. 5 lakh.
- There must be a 30% corporate tax for domestic companies and 35% for foreign companies and there should be no Minimum Alternate Tax (MAT).
- There Should be a 14% Central Value Added Tax (CENNAT) rate.
- There should be nationwide VAT and Comprehensive Service Tax.
- Exemptions for life-saving drugs, security items, and farm products.
- Exemption of tax for small-scale units with a turnover up to Rs. 50 lakh.
- A task force on Direct and Indirect Taxes was constituted under the chairmanship of DR. Vijay Kelkar in 2002. The recommendation of the Vijay Kelkar committee are:
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The Regional Rural Banks were established on the recommendations of the ______ on Rural Credit.a)Rekhi Committeeb)Narsimha Committeec)Kelkar Committeed)Tandon Committeee)None of theseCorrect answer is option 'B'. Can you explain this answer?
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