Rural credit policy in India has had at its core the twin goals of bringing an increasing number of people within the formal financial system and using credit as an instrument of poverty alleviation. Several measures have been taken by Government of India and Reserve Bank of India, from time to time to achieve these goals.
Even after commercial banks were brought into the field of Rural banking in the post nationalization scenario, a large segment of the rural population remained out side the fold of banking services. Therefore, the Govt. of India took a decision to establish a new set up regionally oriented rural banks which would combine the local feel, familiarity characteristic of co-operatives and professionalism and resource base of commercial banks. Following the recommendations of the committee, Regional Rural banks (RRBs) were set up first on 2nd October, 1975. Their number went up to 196 by the year 1987.
As enshrined in the Preamble to the RRBs Act, 1976, The RRBs were established with a view to developing the rural economy by providing, for the purpose of development of agriculture, trade commerce, industry and other productive activities in the rural areas, credit and other facilities, particularly to small and marginal farmers, agricultural labourers, artisans and small entrepreneurs, and for matters connected therewith and incidental thereto.
It was in the year 2004 that Government of India, decided to consolidate the RRBs into state-level entities sponsored by same commercial bank. The amalgamation process began in September, 2005.
2ND Floor, Modi Chambers, II Cross, Gandhinagar