Question

    The ownership structure of a Regional Rural bank is?

    A Central government – 50%, state government – 15%, Nabard – 35% Correct Answer Incorrect Answer
    B Central government – 50%, state government – 35%, Nabard – 15% Correct Answer Incorrect Answer
    C Central Government – 50%, state government – 15%, Sponsor bank – 35% Correct Answer Incorrect Answer
    D Central Government – 50%, state government – 35%, Sponsor bank – 15% Correct Answer Incorrect Answer
    E Central Government – 50%, Nabard – 35%, Sponsor bank – 15% Correct Answer Incorrect Answer

    Solution

    Regional Rural Banks came into existence under the Regional Rural Banks Act 1976 on the recommendation of the Narsimham Committee working group. The purpose of these RRBs was to provide sufficient banking and credit facility for agriculture and other rural activities. The RRB Act allowed the government to set up banks from time to time wherever it considered necessary. The RRBs were owned by three entities with their respective shares as follows: Central Government → 50% State government → 15% Sponsor bank → 35% Regional Rural Banks were conceived as low cost institutions having a rural ethos, local feel and pro poor focus. Every bank was to be sponsored by a “Public Sector Bank”, however, they were planned as the self-sustaining credit institution which were able to refinance their internal resources themselves and were excepted from the statutory pre-emptions.

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