The genesis of RRBs can be traced back to 1975, following the recommendations of the Narasimham Working Group.

Initially created through an ordinance, RRBs were later given a statutory foundation through the Regional Rural Banks Act, 1976.

First RRB established was Prathama Bank (sponsored by Syndicate Bank) in Uttar Pradesh.

The primary objective of RRBs is to develop the rural economy by providing banking and financial services to: small and marginal farmers, agricultural labourers. artisans and small entrepreneurs.

RRBs follow a tripartite ownership model, ensuring coordinated support from the Centre, State, and sponsoring banks: 🔸Government of India – 50% 🔸State Government – 15% 🔸Sponsor Bank (usually a Public Sector Bank) – 35%

They are regulated by the Reserve Bank of India (RBI) and supervised by NABARD.

RRBs have been consolidated in a phased manner based on the recommendations of Dr. K.C. Vyas Committee (2001).

March 2025

Financial health of the RRBs has improved in the recent years as they have posted highest ever consolidated net profit of 7,571 crores in the financial year 2023 - 2024.

Have also shown consistent improvements in key financial parameters like CRAR, Deposits, Advances, NPA, CD ratio.