As per Section 3 of the Regional Rural Banks Act, 1976, who has the authority to establish a Regional Rural Bank in a State or Union Territory, and on whose request?

Section 3 of the Regional Rural Banks Act, 1976 vests the power to establish an RRB exclusively with the Central Government, but this power can only be exercised upon a formal request from a Sponsor Bank, and the establishment must be done through a notification published in the Official Gazette. This notification specifies both the name of the new RRB and the local geographical limits within which it is permitted to operate, ensuring a clearly defined area of rural service. Once established, every RRB becomes a body corporate with perpetual succession and a common seal, giving it the legal capacity to acquire, hold, and dispose of property, as well as to sue and be sued in its own name. The Act was designed with the broader objective of developing the rural economy by channeling credit and financial services toward agriculture, trade, commerce, industry, and other productive activities, particularly benefiting small and marginal farmers, agricultural labourers, artisans, and small entrepreneurs. The Sponsor Bank's responsibilities extend beyond just requesting establishment, since it is also required to subscribe to the RRB's share capital, train its personnel, and provide managerial and financial assistance, originally for a fixed five-year period before the 2015 amendment removed this time limit.