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Consider the following statements with reference to Regional Rural Banks (RRBs):
1. Regional Rural Banks were set up on the basis of the recommendations of the Narasimham Working Group (1975).
2. The equity of a regional rural bank is completely owned by the state government.
Which of the statements given above is/are correct?
  • a)
    1 only
  • b)
    2 only
  • c)
    Both 1 and 2
  • d)
    Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements with reference to Regional Rural Ban...
  • Regional Rural Banks (RRBs) are financial institutions that ensure adequate credit for agriculture and other rural sectors. Regional Rural Banks were set up on the basis of the recommendations of the Narasimham Working Group (1975), and after the legislation of the Regional Rural Banks Act, 1976. The first Regional Rural Bank “Prathama Grameen Bank” was set up on October 2, 1975. Hence statement 1 is correct.
  • At present, there are around 40 RRBs in India (43 as of 2020). 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. Hence statement 2 is not correct.
  • The RRBs combine the characteristics of a cooperative in terms of familiarity with rural problems and a commercial bank in terms of its professionalism and ability to mobilize financial resources. Each RRB operates within the local limits as notified by Government.
  • The main objectives of RRBs are to provide credit and other facilities‚ especially to the small and marginal farmers‚ agricultural laborers artisans and small entrepreneurs in rural areas with the objective of bridging the credit gap in rural areas, checking the outflow of rural deposits to urban areas and reduce regional imbalances and increase rural employment generation.
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Consider the following statements with reference to Regional Rural Banks (RRBs):1. Regional Rural Banks were set up on the basis of the recommendations of the Narasimham Working Group (1975).2. The equity of a regional rural bank is completely owned by the state government.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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