Rural banking in India started since the establishment of banking sector in India. Rural Banks in those days mainly focussed upon the agro sector. Regional rural banks in India penetrated every corner of the country and extended a helping hand in the growth process of the country.

SBI has 30 Regional Rural Banks in India known as RRBs. The rural banks of SBI is spread in 13 states extending from Kashmir to Karnataka and Himachal Pradesh to North East. The total number of SBIs Regional Rural Banks in India branches is 2349 (16%). Till date in rural banking in India, there are 14,475 rural banks in the country of which 2126 (91%) are located in remote rural areas. 

Apart from SBI, there are many other banks which function for the development of the rural areas in India. These banks are listed below:

Andhra Pradesh Bihar

Andhra Pradesh Grameena Vikas Bank

Andhra Pragathi Grameena Bank

Deccan Grameena Bank

Chaitanya Godavari Grameena Bank

Saptagiri Grameena Bank

Chhattisgarh

Chhattisgarh Gramin Bank

Surguja Kshetriya Gramin Bank

Durg-Rajnandgaon Gramin Bank

Haryana

Harayana Gramin Bank

Gurgaon Gramin Bank

Jammu & Kashmir

Jammu Rural Bank

Ellaquai Dehati Bank

Kamraz Rural Bank

Assam

Assam Gramin Vikash Bank

Langpi Dehangi Rural Bank

Jharkhand

Jharkhand Gramin Bank

Vananchal Gramin Bank

Madhya Pradesh

Narmada Malwa Gramin Bank

Satpura Kshetriya Gramin Bank

Madhya Bihar Gramin Bank

Bihar Kshetriya Gramin Bank

Uttar Bihar Kshetriya Gramin Bank

Kosi Kshetriya Gramin Bank

Samastipur Kshetriya Gramin Bank

Gujarat

Dena Gujarat Gramin Bank

Baroda Gujarat Gramin Bank

Saurashtra Gramin Bank

Himachal Pradesh

Himachal Gramin Bank

Parvatiya Gramin Bank

Punjab

Punjab Gramin Bank

Faridkot-Bhatinda Kshetriya Gramin Bank

Malwa Gramin Bank

Kerala

Narmada Malwa Gramin Bank

North Malabar Gramin Bank

Tamil Nadu

Pandyan Grama Bank

Pallavan Grama Bank

Maharashtra

Marathwada Gramin Bank

Aurangabad -Jalna Gramin Bank

Madhya Bharath Gramin Bank

Chambal-Gwalior Kshetriya Gramin Bank

Rewa-Sidhi Gramin Bank

Sharda Gramin Bank

Ratlam- Mandsaur Kshetriya Gramin

Bank Vidisha Bhopal Kshetriya Gramin Bank

Mahakaushal Kshetriya Gramin Bank

Jhabua Dhar Kshetriya Gramin Bank

Wainganga Kshetriya Gramin Bank

Vidharbha Kshetriya Gramin Bank

Solapur Gramin Bank

Thane Gramin Bank

Ratnagiri-Sindhudurg Gramin Bank

Karnataka

Karnataka Vikas Grameena Bank

Pragathi Gramin Bank

Cauvery Kalpatharu Grameena Bank

Krishna Grameena Bank

Chikmagalur-Kodagu Grameena Bank

Visveshvaraya Gramin Bank

Rajasthan

Baroda Rajasthan Gramin Bank

Marwar Ganganagar Bikaner Gramin

Bank Rajasthan Gramin Bank

Jaipur Thar Gramin Bank

Hodoti Kshetriya Gramin Bank

Mewar Anchalik Gramin Bank

Orissa

Kalinga Gramya Bank

Utkal Gramya Bank

Baitarani Gramya Bank

Neelachal Gramya Bank

Rushikulya Gramya Bank

West Bengal

Bangiya Gramin Vikash Bank

Paschim Banga Gramin Bank

Uttar Banga Kshetriya Gramin Bank

Meghalaya

Ka Bank Nogkyndong Ri Khasi- Jaintia

Arunachal Pradesh

Arunachal Pradesh Rural Bank

Manipur

Manipur Rural Bank

Mizoram

Mizoram Rural Bank

Nagaland

Nagaland Rural Bank

Tripura

Tripura Gramin Bank

Uttar Pradesh

Purvanchal Gramin Bank

Kashi Gomti Samyut Gramin Bank

Uttar Pradesh Gramin Bank

Shreyas Gramin Bank

Lucknow Kshetriya Gramin Bank

Ballia Kshetriya Gramin Bank

Triveni Kshetriya Gramin Bank

Aryavart Gramin Bank

Uttaranchal

Uttaranchal Gramin Bank

Nainital Almora Kshetriya Gramin Bank

Kisan Gramin Bank

Kshetriya Kisan Gramin Bank

Etawah Kshetriya Gramin Bank

Rani Laxmi Bai Kshetriya Gramin Bank

Baroda Western Uttar Pradesh Gramin

Bank

REGIONAL RURAL BANKS

The Narasimham committee on rural credit recommended the establishment of Regional Rural Banks (RRBs) on the ground that they would be much better suited than the commercial banks or co-operative banks in meeting the needs of rural areas. Accepting the recommendations of the Narasimham committee, the government passed the Regional Rural Banks Act, 1976. A significant development in the field of banking during 1976 was the establishment of 19 Regional Rural Banks (RRBs) under the Regional Rural Banks 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” .

Objective Functions Regional Rural Banks in India Regional Rural Banks in Tamil Nadu

RRBs established with the explicit objective of

Top

Bridging the credit gap in rural areas Check the outflow of rural deposits to urban areas Reduce regional imbalances and increase rural employment generation

The main objectives of setting up the RRB is to provide credit and other facilities‚ especially to the small and marginal farmers‚ agricultural labourers artisans and small entrepreneurs in rural areas.

Each RRB will operate within the local limits specified by notification.

If necessary‚ a RRB will also establish branches or agencies at places notified by the Government.

Each RRB is sponsored by a public sector bank‚ which provides assistance in several ways‚ viz., subscription to its share capital‚ provision of such managerial and financial assistance as may be mutually agreed upon and help the recruitment and training of personnel during the initial period of its functioning.

Functions

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Every RRB  is authorized to carry on to transact the business of banking as defined in the Banking Regulation Act and may also engage in other business specified in Section 6 (1) of the said Act. In particular‚ a RRB is required to undertake the business of

(a) granting loans and advances to small and marginal farmers and agricultural  laborers‚ whether individually or in groups,  and to cooperative societies‚ including agricultural marketing societies‚ agricultural processing societies‚ cooperative farming societies‚ primary agricultural credit societies or farmers’ service societies‚ primary agricultural purposes or agricultural operations or other related purposes, and

(b) granting loans and advances to artisans‚ small entrepreneurs and persons of small means engaged in trade‚ commerce‚ industry or other productive activities‚ within its area of operation.

The Reserve Bank of India has brought RRB’s under the ambit of priority sector lending on par with the commercial banks. They have to ensure that forty percent of their advances are accounted for the priority sector. Within the 40% priority target, 25% should go to weaker section or 10% of their total advances to go to weaker section.

Regional Rural Banks in India

Top

The State Bank of India is one of the major commercial banks having regional rural banks. There are 30 Regional Rural Banks in India, under the State Bank of India and it is spread in 13 states across India. The number of branches the SBI Regional Rural Banks is more than 2000. 

Several other banks, apart from the State Bank of India also functions as the promoter of rural development in India.

The other Regional Rural Banks in India are -

Haryana State Cooperative Apex Bank Limited

The main purpose of the Haryana State Cooperative Apex Bank Limited is to financially assist the artisans in the rural areas, farmers and agrarian unskilled labor, and the small rural entrepreneurs of Haryana. Haryana State Cooperative Apex Bank Limited also referred as the HARCOBANK, is one of the apex organizations in the state of Haryana. The HARCOBANK holds a special economic position in the state of Haryana. The Haryana State Cooperative Apex Bank Limited offers several types of financial assistances to the individuals. The financial aids include credit for the promotion of agriculture, non-agrarian credit, and bank deposit facilities. The HARCOBANK have been functioning as an investor for more than three decades.

National Bank for Agriculture and Rural Development

The main purpose of the National Bank for Agriculture and Rural Development is to provide credit for the development and publicity of small scaled industries, handicrafts, rural crafts, village industries, cottage industries, agriculture, etc. The NABARD also supports all other related economic operations in the rural sector, promotion of sustainable growth in the rural sector. The NABARD also plays the role of a contributor to the rural development by the means of promoting institutional development, facilitating

refinance to loan providers in the rural sector, inspection, monitoring, and evaluation of client financial corporations. National Bank for Agriculture and Rural Development (NABARD) was established as the premiere rural development bank.

Sindhanur Urban Souharda Co-operative Bank

The main purpose of the Sindhanur Urban Souharda Co-operative Bank is to provide financial support to the rural sector. The Sindhanur Urban Souharda Co-operative Bank is more commonly known as the SUCO Bank.

United Bank of India

The role played by the United Bank of India (UBI) as one of the regional rural banks is phenomenal. The UBI has propagated the network of branches in order to actively take part in the rural improvement and development.

Syndicate Bank

The Syndicate Bank has it grass roots in the rural sector. The development of the Syndicate Bank was in accordance to the development of the banking sector in India and. The Syndicate Bank has performed actively in the development of the rural sector in India. 

The Regional Rural Banks in India has actively contributed to the growth of the rural sector. The growth of the rural industries in India and the development of the rural business and economy have been dependent largely on the investment and financial aids provided by the Regional Rural Banks in India.

Regional Rural Banks

In the multiagency approach to provide credit to agriculture, Regional Rural Banks (RRB’s) have special place. They are state sponsored, regionally based and rural oriented commercial banks. The Govt. of India, in July 1975, appointed a Working Group to study in depth the problem of devising alternative agencies to provide institutional credit to the rural people in the context of steps then initiated under the 20 Point Economic Programme. The Working Group identified various weaknesses of the co-operative credit agencies and the commercial banks and felt that these institutions would not be able to fill the regional and functional gaps in the rural credit system within a reasonable period of time. The Group therefore recommended a new type of institution which combines

a. Local feel and familiarity with rural possess problems which co-operative banks.

b. Degree of business organization ability to mobilise deposit, access to money market and modernised outlook which commercial banks have.

Thus, it was envisaged to combine desirable qualities of co-operative banks and commercial banks in RRB’s at the same time, it was emphasised that the role of RRB’s would be to supplement and not supplant the other institutional agencies already existing in the field.

Formation and Objective:3

The Government of India promulgated the Regional Rural Banks Ordinance on 26th September 1975, which was later replaced by the Regional Rural Bank Act 1976. The preamble to the Act states the objective to develop rural economy by providing credit and

facilities for the development of agriculture, trade, commerce, industry and other productive activities in the rural areas, particularly to small and marginal farmers, agricultural labourers, artisans and small entrepreneurs.

Capital Structure:

The RRB Act empowers the Central Govt. to open the banks from time to time at places where it may consider it necessary. A Regional Rural Bank is jointly owned by the Govt. of India, the Government of concerned state and public sector bank, which sponsored it. The authorised capital of each bank is Rs. 1 crore and the issued capital is Rs. 25 lakhs; which is held by them in the proportion of 50, 15 and 35 per cent respectively. Each bank carries the banking business within the local limits specified by the Govt. notification.

Organisational structure:

The management of a RRB is vested in a nine-member Board of Directors headed by

i. Chairman who is an officer deputed by a sponsor bank but appointed by the Govt. of India.

ii. Three directors to be nominated the Central Govt.

iii. Two directors to be nominated by the concerned State Govt.

iv. Three directors to be nominated by the sponsor bank.

The sponsor bank, besides subscribing to the capital and deputing one of its official as chairman, provides assistance to RRB in several ways such as financial accommodation, deputing managerial and other staff and arranging the recruitment of staff and their training.

Functions:

Every RRB may undertake the following types of functions:

I. The granting of loans and advances particularly to small and marginal farmers and agricultural laboursers individually or to a group, co-operative societies, agricultural processing societies, co-operative farming societies, etc.

J. The Granting of loans and advances to artisans, small entrepreneurs and small traders, businessmen, etc.

The Reserve Bank of India has brought RRB’s under the ambit of priority sector lending on par with the commercial banks. They have to ensure that forty percent of their advances are accounted for the priority sector. Within the 40% priority target, 25% should go to weaker section or 10% of their total advances to go to weaker section.

Rural Banking

By

Ms. E. JeevithaFaculty

Department of Management Studies and ResearchTamilnadu College of Engineering

Coimbatore 

ABSTRACT

Rural banking in India started since the establishment of banking sector in India. Rural Banks in those days mainly focused upon the agro sector. Today, commercial banks and Regional Rural Banks in India are penetrating every corner of the country are extending a helping hand in the growth process of the rural sector in the country.

This paper entitled 'RURAL BANKING' throws light on the following aspects:

* Rural Banking – an introduction* Banks: functioning for development of rural areas * Co-operative banks and rural credit  * Commercial banks and rural credit* Regional rural banks and rural credit* Role of RBI in rural credit * Marketing of mutual fund units-RRBs* Conclusion

RURAL BANKING

INTRODUCTION

Rural banking in India started since the establishment of banking sector in India. Rural Banks in those days mainly focused upon the agro sector. Today, commercial banks and Regional rural banks in India are penetrating every corner of the country are extending a helping hand in the growth process of the rural sector in the country.

BANKS: FUNCTIONING FOR THE DEVELOPMENT OF RURAL AREAS

The area of operation of a majority of the RRBs is limited to a notified area comprising a few districts in a State.SBI has 30 Regional Rural Banks in India known as RRBs. The rural banks of SBI are spread in 13 states extending from Kashmir to Karnataka and Himachal Pradesh to North East. Apart from SBI, there are other few banks which functions for the development of the rural areas in India. Few of them are as follows.

Haryana State Cooperative Apex Bank Limited NABARD Sindhanur Urban Souharda Co-operative Bank United Bank of India Syndicate Bank Co-operative bank

CO-OPERATIVE BANKS AND RURAL CREDIT

The Co-operative bank has a history of almost 100 years. The Co-operative banks are an important constituent of the Indian Financial System, judging by the role assigned to them, the expectations they are supposed to fulfill, their number, and the number of offices they operate.

Their role in rural financing continues to be important even today, and their business in the urban areas also has increased phenomenally in recent years mainly due to the sharp increase in the number of primary co-operative banks.

Co-operative Banks in India are registered under the Co-operative Societies Act. The RBI also regulates the cooperative bank. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

Co-operative banks in India finance rural areas under:

Farming Cattle Milk Hatchery Personal finance 

Institutional Arrangements for Rural Credit (Co-operatives)

Short Term Co-operatives Long Term Co-operatives

Short Term Co-operatives|

District Central Co-operative Banks| 

State Co-operative Banks|

Primary Agriculture Credit Co-operative Societies|

Branches

Long Term Cooperatives|

State Agriculture & Rural Development Banks|

Primary Agriculture & Rural Development Banks|

Branches

Primary Agricultural Credit Societies (PACSs)

An agricultural credit society can be started with 10 or more persons normally belonging to a village or a group of villages. The value of each share is generally nominal so as to enable even the poorest farmer to become a member. The members have unlimited liability, that is each member is fully responsible for the entire loss of the society, in the event of failure. Loans are given for short periods, normally for the harvest season, for carrying on agricultural operation, and the rate of interest is fixed. There are now over 92,000 primary agricultural credit societies in the country with a membership of over 100 million.

The primary agricultural credit society was expected to attract deposits from among the well –to-do members and non-members of the village and thus promote thrift and self-help. It should give loans and advances to needy members mainly out of these deposits.

Central Co-operative Banks (CCBs)

The central co-operative banks are located at the district headquarters or some prominent town of the district. These banks have a few private individuals also who provide both finance and management. The central co-operative banks have three sources of funds,

Their own share capital and reserves Deposits from the public and Loans from the state co-operative banks

Their main function is to lend to primary credit society apart from that, central coopertive banks have been undertaking normal commercial banking business also, such as attracting deposits from the general public and lending to the needy against proper securities. There are now 367 central co-operative banks.

State Co-operative Banks (SCBs)

The state Co-operative Banks, now 29 in number, they finance, co-ordinate and control the working of the central Co-operative Banks in each state. They serve as the link between the Reserve bank and the general money market on the one side and the central co-operative and primary societies on the other. They obtain their funds mainly from the general public by way of deposits, loans and advances from the Reserve Bank and they are own share capital and reserves.

COMMERCIAL BANKS AND RURAL CREDIT

The commercial banks at present provide short term crop loans account for nearly 45 to 47% of the total loans given and disbursed by the commercial banks. Term loans for varying periods are given for purchasing pump sets, tractors and other agricultural machinery, for construction of wells and tube well, for development of fruit and garden crops, for leveling and development of land, for purchase of ploughs, animals, etc. commercial banks also extend loans for allied activities viz., for dairying, poultry, piggery, bee keeping, fisheries and others. These loans come to 15 to 16%.

Commercial Banks and Small Farmers

The commercial banks identifying the small farmers through Small Farmers Development Agencies (SFDA) set up in various districts and group them into various categories for credit support so as to enable them to become bible cultivators. As regard small cultivators near urban areas and irrigation facilities, commercial banks can help them to go in for vegetable cultivation or combine it with small poultry farming and maintaing of one or two milch cattle.

IRDP and commercial banks

Since October 1980, the Integrated Rural Development Programme (IRDP) has been extended to all the blocks in the country and the commercial banks have been asked by the government of India to finance IRDP. The lead banks have to prepare banking plans and allocate the responsibility of financing the identified beneficiaries among the participating banks. Commercial banks have been asked to finance all economically backward people identified by government agencies.

REGIONAL RURAL BANKS AND RURAL CREDIT

The Narasimham committee on rural credit recommended the establishment of Regional Rural Banks (RRBs) on the ground that they would be much better suited than the commercial banks or co-operative

banks in meeting the needs of rural areas. Accepting the recommendations of the Narasimham committee, the government passed the Regional Rural Banks Act, 1976. The main objective of RRBs is to provide credit and other facilities particularly to the small and marginal farmers, agricultural laborers, artisians and small entrepreneurs and develop agriculture, trade, commerce, industry and other productive activities in the rural areas.

The progress of RRBs in the initial stage was quite rapid. For instance, the Sixth Five-year plan(1980-85) had envisaged the setting up of 170 RRBs covering 270 districts by the end of march 1985.The target was exceeded. There are now 196 RRBs in 23 states of the country with 14,200 branches.

Structure of regional rural bank

The establishment of the Regional Rural Banks (RRBs) was initiated in 1975 under the provisions of the ordinance promulgated on 26.9.1975 and thereafter Section 3(1) of the RRB Act, 1976. The issued capital of RRBs is shared by Central Government, sponsor bank and the State Government in the proportion of 50%, 35% and 15% respectively.

RRBs established with the explicit objective of:

* Bridging the credit gap in rural areas* Check the outflow of rural deposits to urban areas* Reduce regional imbalances and increase rural employment generation

ROLE OF RBI IN RURAL CREDIT

Since it was set up in 1934, RBI has been taking keen interest in expanding credit to the rural sector. After NABARD was set up as the apex bank for agriculture and rural development, RBI has been taking a series of steps for providing timely and adequate credit through NABARD.

Scheduled commercial banks excluding foreign banks have been forced to supplement NABARDs efforts-through the stipulation that 40percent of net bank credit should go to the priority sector, out of which at least 18 percent of net bank credit should flow to agriculture. Besides, it is mandatory that any shortfall in fulfilling the 40 percent target or the 18 percent sub-target would have to go to the corpus Rural Infrastructure Development Fund(RIDF).RBI has also taken steps in recent years to strengthen institutional mechanisms such as recapitalisation of Regional Rural Banks (RRBs) and setting up of local area banks(LABs).

Micro-Finance

Micro-finance is a novel approach to "banking with poor"as they attempt to combine lower transaction costs and high degree of repayments.The major thrust of these micro-finance initiatives is through the setting up of  Self Help Groups (SHGs),Non-Governmental organizations(NGOs),Credit Unions etc.

Kisan(Farmers') Credit Card

Another notable development in recent years is the introduction of Kisan Credit Cards(KCC) in 1998-99.The purpose of the Kisan Credit Cards(KCC) scheme is to facilities short term credit to farmers.The scheme has gained popularity and its implementation has been taken up by 27 commercial banks, 187 RRBs and 334 Central cooperative banks.

Agricultural Insurance

As Agricultural is highly susceptible to risks such as drought, flood, pests etc.It is necessary to protect the farmers from natural calamities and ensure their credit eligibility from the next season. Towards this purpose, the Government of India introduced a comprehensive crop insurance scheme throught the country in 1985 covering major cereal crops, oilseeds and pulses. Among commercial crops, seven crops viz., sugarcane potato, cotton, ginger, onion, turmeric and chillies are presently covered.

MARKETING OF MUTUAL FUND UNITS - RRBS 

With a view to expanding the scope of business of RRBs and considering that marketing of Mutual Fund (MF) units provides a profitable avenue for banks, it has been decided by RBI on 17th May 2006 to allow Regional Rural Banks (RRBs) to undertake marketing of units of Mutual Funds, as agents.

Accordingly, RRBs may, with approval of their Board of Directors, enter into agreements with Mutual Funds for marketing their units subject to the following terms and conditions: 

* The bank should only act as an agent of the customers, forwarding applications of the investors for purchase / sale of MF units to the Mutual Fund / Registrar Transfer Agents. 

* The purchase of MF units should be at the risk of customers and without the bank guaranteeing any assured return. 

* The bank should not acquire such units of Mutual Fund from the secondary market. 

* The bank should not buy back units of Mutual Funds from their customers. 

* The bank holding custody of MF units on behalf of their customers should ensure that its own investment and investments belonging to their customers are kept distinct from each other. 

* Retailing of units of Mutual Funds may be confined to some select branches of the bank to ensure better control. 

* The bank should comply with the extant KYC/ AML guidelines in respect of the applicants. 

* The RRBs should put in place adequate and effective control mechanisms in consultation with their sponsor banks.

CONCLUSION

RRBs' performance in respect of some important indicators was certainly better than that of commercial banks or even cooperatives. RRBs have also performed better in terms of providing loans to small and retail traders and petty non-farm rural activities. In recent years, they have taken a leading role in financing Self-Help Groups (SHGs) and other micro-credit institutions and linking such groups with the formal credit sector.

RRBs should really be strengthened and provided with more resources with which they can undertake more of these important activities. And most certainly they should be kept apart from a profit-oriented corporate motivation that would reduce their capacity to provide much needed financial services to the rural areas, including to agriculture. Ideally, the best use of the resources raised by RRBs through deposits would be through extensive cross-subsidisation. This, in turn, really requires an apex body that would cover and oversee all the RRBs, something like a National Rural Bank of India (NRBI).

The number of rural branches should be increased rather than reduced; they should be encouraged to develop more sophisticated methods of credit delivery to meet the changing needs of farming; and most

of all, there should be greater coordination between district planning authorities, panchayati raj institutions and the banks operating in rural areas. Only then will the RRBs fulfill the promise that is so essential for rural development.

Role of Regional Rural Banks in Economic DevelopmentThe importance of the rural banking in the economic development of a country cannot be overlooked. As Gandhiji said “Real India lies in villages,” and village economy is the backbone of Indian economy. Without the upliftment of the rural economy as well as the rural people of our country, the objectives of economic planning cannot be achieved. In fact, the real growth of Indian economy lied in the emancipation of rural masses from acute poverty, unemployment, and socio-economic backwardness. Keeping this end in view, various important plans and programmes of rural development have been conceived and implemented by the government of India since the commencement of first five-year plan from 1951-56. But an appraisal of the achievement of these programmes clearly reveals that much programmes failed to achieve the desired objectives due to the backward economic condition and lack of adequate finance to the poor people in the rural areas. Hence, bank and other financial institutions are of vital importance for development of rural economy of a country. The present study is a modest attempt to make an appraisal of the credit needs of the rural people and the way Regional Rural Bank, i.e., Arunachal Pradesh Rural Bank, has been extending its service to meet the same in the state of Arunachal Pradesh. It deals with the performance evaluation of Arunachal Pradesh. Rural Bank (APRB) for the economic development of the state. Further, an attempt has also been made to study the growth and performance of Scheduled Commercial Banks with special emphasis on Regional Rural Banks (RRBs) in Indian and North-East Region.

Regional Rural Banks: Regional Rural Banks [RRBs] were established under the Regional Rural Banks Act, 1976 with a view to give a boost to rural economy by providing rural credit to farmers, agricultural labourers, artisans and small entrepreneurs etc. At present, the State has presence of two RRBs - Assam Gramin Vikash Bank and Langpi Dehangi Rural Bank. While the Assam Gramin Bank is operating both in the Brahmaputra Valley and Barak Valley covering 25 districts with 356 bank branches, the service area of the Langpi Dehangi Rural Bank is confined within the two hill districts of Assam with 42 bank branches as on March 2010. The aggregate deposit of RRB was Rs.3691.39 crore at the end of March 2010 as against Rs.3044.07 crore at the end of March 2009 thereby registering a growth of 21.26 percent. The aggregate deposit of RRBs was 2496.00 crore at the end of March 2008. The volume of credit disbursed by these banks was also increased to Rs.1753.55 crore as on March 2010 from Rs.1510.43 crore as on March 2009 indicating an increase of 16.1 percent. Credit-Deposit ratio of these banks, on the other hand, marginally fall to 47.50 as on March 2010 from 49.60 as on March 2009. The credit-deposit ratio of RRBs was Rs.53.60 as on March 2007. 

Achievement of Regional Rural Banks in Assam: 

Period (As on)

Achievement under Annual Credit Plan (Rupees in Lakh)

Credit - Deposit Ratio

Annual Target for All Banks

Achievement of All Banks

Achievement of RRBs

All Banks RRBs

31.03.2006 92903.27 117699.6922665.38 (19.25%)

45.51 50.49

31.03.2007 114100.11 144984.6626362.38 (18.18%)

48.03* 53.60

31.03.2008 175518.40 155511.3332211.73 (20.71%)

50.48* 52.64

31.03.2009 221924.24 150226.67 37082.91 (24.68) 45.85* 49.62

31.03.2010 257892.21 250725.49 52181.55 (20.81) 42.05* 47.50

Priority Sector Advances: The volume of aggregate advances under priority sector, according to the State Level Bankers Committee reports, have increased from Rs.6148.70 crore in 2006-07 to Rs.11314.92 crore in 2009-10. Thus, the volume of aggregate advances recorded 84.0 percent growth during the last four years. This growth was 262.7 percent when compared with the credit extended to the priority sector during the year 2004-05. During the period from 2004-05 to 2009-10, the priority sector advances have been above the bench-mark of 40 per cent of net bank credit. The percentage share of priority sector loans extended to agriculture & allied activities achieved all India bench mark of 18 percent during the year 2009-10 in the State. The disbursement advances to agriculture & allied activities has steadily increased from Rs.616 crore [9.48%] in 2004-05 to Rs.2345.86 crore [13.22%] in 2008-09 and further to Rs.3868.37 crore [18.50%] in 2009-10. The per capita priority sector advances has significantly increased from Rs.1170.00 to 5917.00 during the period from 2004 to 2010. 

Advances Outstanding under priority Sector:(Rupees in Crore)

Sectors 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Aggregate Advances 6497.59 9811.15 12989.44 16081.43 17750.99 20910.97

Total Priority Sector Advance

3119.99 [48.02%]

4248.21 [43.30%]

6148.70 [47.34%]

8322.25 [51.75%]

10705.50 [60.31]

11314.92 [54.11]

Agriculture and Allied Activities

616..15 [9.48%]

1212.84 [12.36%

1596.74 [12.29%]

2158.80 [13.42%]

2345.86 [13.22]

3868.37 [18.50]

Industries515.87 [7.94%]

685.52 [6.99%]

1018.13 [7.84%]

1281.63 [7.9%]

1460.25 [8.23]

2054.15 [9.82]

# Per capita Priority Sector Advances [Figure in Rs.]

1170 1594 2307 3122 4016 5917

28.Assam Gramin Vikash Bank

437206.00 212666.06 500.00 48.64 48.76

29.Langpi Dehangi Rural Bank

26923.53 15863.87 0.00 58.92 58.92

 Regional Rural Bank Total

464129.53 228529.93 500.00 49.24 49.35

Regional Rural BankAssam 399 3678 1746

India 15303 142422 83503

Regional Rural Bank

403 2496 1313 52.60 402 3040 1468 48.29 399 3678 1746 47.47

Assam's economy is fundamentally based on agriculture. Over 70 percent of the state's population relies on agriculture as farmers, as agricultural laborers, or both for their livelihood. A majority of state's population, almost 90 percent of an estimated 22.4 million in 1991, live in rural areas where the mainstay of business is production agriculture. In terms of the state domestic product (SDP), the agriculture sector contributed over 38 percent of the state income in 1990-91.

Assam : The Land of Red Rivers and Blue Hills

Our Assam is Beautiful, Her Virtues are Infinite

Assam, the land of hills and valleys, the land of the mighty river Brahmaputra, the land of Mother Goddess

Kamakhya, lies in the northeastern corner of India. In these pages, you will find a few glimpses of Assam and

Assamese people.

Assam is a land of about 25 million people situated in the northeast corner of

India. The principal language of Assam is Assamese although a large number

of other languages are spoken. Assam comprises an area of 78,523 square

kilometers (30,318 square miles). Except for a narrow corridor running through

the foothills of the Himalayas that connects the state with West Bengal, Assam

is almost entirely isolated from India. The capital of Assam, is Dispur, a suburb

of Guwahati in 1972.

The name "Assam" is derived from the term "Asom" which, in Sanskrit, refers to unequal or unrivalled. The uneven

topography of the land, full of hills, plains and rivers might, therefore, have contributed to her name. The Mongolian

Ahom dynasty which had ruled Assam for more than six hundred years might also be the cause for her name.

Assam is a land with an illustrious recorded history going back to the 4th century BC. Assam was an independent

kingdom throughout all of history till the end of the first quarter of the 19th century when the British conquered the

kingdom and annexed it to British India. The current state capital of Assam, Guwahati, known in ancient time as

Pragjyotishpura or The Eastern City of Light, was the capital of Kamrup which finds frequent mention in the Great

Hindu Epic Mahabharata and other Sanskrit volumes and historical lores.

Assam's economy is based on agriculture and oil. Assam produces a significant part of the total tea production of the

world. Assam produces more than half of India's petroleum.

The current political situation in Assam is unstable with United Liberation of Asom (ULFA) fighting a low-intensity but

wide-spread guerrilla warfare for independence from India. Although the Indian military has tried to quell the

insurgents with a large presence for more than ten years, they have been not very successful. There are other

militant groups who are seeking independence or autonomy in Assam. There have been consistent reports of grave

human rights violations in Assam committed primarily by the Indian military.

Photo of sunset on the campus of Jorhat Engineering College was taken by Chandan Mahanta of St. Louis.

The humidity that is brought into Assam by the southwest monsoons, which shower an average annual rainfall of 120

inches or more on the great Brahmaputra valley and the surrounding region, also create spectacular sunsets during

most of the year. The monsoons are Assam's life blood; creating a bio-diversity that can compete with the equatorial

rain-forests and painting the region with a thousand shades of green.

Coordinates (Dispur):  26.14°N 91.77°ECoordinates: 

26.14°N 91.77°E

Country  India

Established 15 August 1947 (64 years ago)

Capital Dispur

Largest city Guwahati

Districts 27

Government[*]

 • Governor J B Patnaik

 • Chief Minister Tarun Gogoi (INC)

 • Legislature Unicameral (126 seats)

 • Parliamentary

constituency

14

 • High Court Gauhati High Court

Area

 • Total 78,550 km2 (30,330 sq mi)

Area rank 16th

Population (2011)

 • Total 31,169,272

 • Rank 14th

 • Density 400/km2 (1,000/sq mi)

Time zone IST (UTC+05:30)

ISO 3166 code IN-AS

HDI  0.534 (medium)

HDI rank 22nd (2005)

Literacy 76.3% (9th)

Official languages Assamese; Bengali (in Barak

Valley), Bodo (inBodoland)[1]

Website assam.gov.in

Rural banking redefinedSMITA BHATTACHARYYA

Jorhat, Aug. 4: The largest regional rural bank of the Northeast, Assam Gramin Vikash Bank, is aiming for the top spot in the country after managing a spectacular turnaround during the last five years.

From suffering losses in the year it was established (2006) to showing profits and even surpluses, the bank has done a spectacular turnaround in the last five years. From the total business level of Rs 2,513 crore as on January 12, 2006, the bank doubled its business level to Rs 5,080 crore by March 31, 2010, and further increased it to Rs 6,449 crore by March 31, 2011.

“We are aiming for the top slot in another five years time,” the bank’s chairman, S.N. Sahu, told The Telegraph, adding, “The bank, which at present occupies the seventh position in the country, has put in place a five-year plan to reach the top spot.”

The bank is benchmarking itself against the best standards and practices in terms of product offering, service level and professional integrity.

The regional rural bank (RRB) will also be equipped with ATMs soon. It has also acquired a license from RBI to start a foreign exchange business, which it plans to start soon. “The core banking solutions process is being completed by August-September and very soon, ATMs will also be put in place,” Sahu said.

A senior official in the Guwahati office of the bank said 25 ATMs would be in place in various places of the state by December.

“RRBs are not generally held in high regard. But the whole scenario has changed and we can now give loans of every type as commercial banks do. We can provide loans up to Rs 25 crore at one go. Customer care, too, is of the best standards,” the official said, adding that the bank was giving a tough fight to commercial banks of the state.

The Centre mooted the idea of RRBs in 1975 to bring about the desired uplift of the rural economy, and accordingly, promulgated an Ordinance, which was subsequently replaced by the Regional Rural Banks Act, 1976.

In Assam, five RRBs were established at different points of time beginning with the Pragjyotish Gaonlia Bank. The proactive attitude and the rural bias of these banks culminated not only in creation of a thrift habit among the rural masses, but also in dispensation of credit to such people, mostly for priority sector activities.

On January 12, 2006, the Centre amalgamated four RRBs sponsored by the United Bank Of India in Assam to form the Assam Gramin Vikash Bank. The amalgamated RRBs were Pragjyotish Gaonlia Bank, Lakhimi Gaonlia Bank, Cachar Gramin Bank and Subansiri Gaonlia Bank. The bank enjoys the status of a scheduled bank vide a Reserve Bank of India notification dated January 27, 2009.

The broader objectives of the amalgamation were to provide better customer service, with better infrastructure, branch computerisation, pool of experienced work force and unified publicity and marketing efforts. It was also aimed at reaping the economics of scale with larger areas of operation, enhanced credit exposure limits along with diversification into different banking activities, leading to higher business growth.

Sahu said the bank ranked topped the national list in terms of number of districts covered. Its operational area consists of 25 districts out of the 27 districts of Assam, barring only the two hill districts — Karbi Anglong and Dima Hasao.

He said the bank’s objectives included uplift of the rural economy vis-à-vis agriculture, micro and small sector, trade and services and other productive activities. “The thrust is on productive credit to the small and marginal farmers, agricultural labourers, artisans and small entrepreneurs, self-help groups and also to other services like packaging, supply and marketing,” he said.

The chairman said the bank, armed with the advantage of having the largest network of 362 branches in rural Assam besides seven regional offices under the head office at Guwahati, was serving the rural masses, who were mostly deprived and denied of banking facilities for augmentation of agricultural production, uplift of the downtrodden, employment of rural youth and with commitment to develop rural Assam.