Growth and performance of RRBs in India and Haryana

Abstract

The history of Regional Rural Banks in India dates back to the year 1975. It’s the Narasimham committee that conceptualized the foundation of Regional Rural Banks in India. The committee felt the need of regionally oriented rural banks that would address the problems and requirements of the rural people in India. Regional Rural Banks were established under the provisions of an Ordinance promulgated on the 26th September 1975 and the RRB Act, 1975 with an objective to ensure sufficient institutional credit for agriculture and other rural sectors. A change in sponsorship may improve the establishment of competition, work culture, efficient management of concerned RRBs. Within two decades of their existence, the RRBs had become financially weak and Government of India (GoI) initiated recapitalisation of the RRBs along with several other policy initiatives to give them operational freedom for enhancing their business opportunities and profitability. Subsequently, in September, 2005, GoI initiated the first phase amalgamation of RRBs, sponsor bank-wise, at state level. By March, 2015, RRBs of the same sponsor banks within a State were amalgamated bringing down their number from 196 to 56. Serva Haryana Gramin Bank came into existence on 29th November 2013 on implication of GOI Notification no. 7/9/2011-RRB dated 29.11.2013, regarding amalgamation of two RRBs viz. Haryana Gramin Bank & Gurgaon Gramin Bank under the Regional Rural Banks Act, 1976 (No. 21 of 1976) and the new entity called as Serva Haryana Gramin Bank with its Head Office at Rohtak (Haryana) sponsored by Punjab National Bank, the Leading Bank in Indian BankingThis paper is based on secondary data, examining the growth and performance of RRBs in India and Haryana and performance of investment, credit, credit-deposit ratio and investment- deposit ratio, profitability, income expenditure and outstanding credit for priority sector, non priorty sector RRBs during 2006-10 to 2017-18.