They have been created with a read to serve primarily the agricultural areas of India with basic banking and monetary services

It is true that the subsidize banks will must bear the load of the RRB wage hike. The RRB salaries, which are fixed according to the state Government scales., differ from State to State, making a quick estimate of the impact of the parity award is difficult. But the impact may not be very heavy in certain States Moreover, during 1988-89, many nationalized banks could not make provisions to pay wage arrears of their own employees, but doctored their accounts to hide this grim fact.
The danger is that this 'Victory' of the All India Rural Regional Bank Employees Association could prod it to press afresh for the merger of the RRB service cadre with that of the commercial banks that, is for parity of service conditions as well. Justice Reddy is convinced of that the pay scales of an organization should be determined by the principles of 'equity and justice' and not by the principal of the organizations ability to pay. The unions are sure to try to stretch this idea further.
But if there is indeed a merger of service cadres, industrial relations in the nationalized banks already plagued by problems over promotions (there are too few available), transfers and posting (everybody wants metropolitan jobs), could deteriorate further with 7,000 new entrants. That is a good reason for continuing to keep a district RRB identifies and to rule out merger.
The RRBs are largely involved in catering to the monetary needs of the weaker sections of the society. Deccan Grameena Bank name changed as Telangana Grameena Bank in 20th October, 2014The The Telangana Grameena Bank is handicapped in phrases of deposit enlistment due to the decrease interest costs than the postal savings schemes, competition from urban cooperative banks and offering of fewer services than the commercial banks.
Despite the operational handicaps, difficulties of terrain, apathetic stance of the beneficiary loaners and such other problems, the Telangana Grameena Bank has been able to maintain better than satisfactory C:D ratio and above - satisfactory recovery rate since its inception. The foregoing analysis of the economic impact of the Telangana Grameena Bank financing activities leads to the following conclusions: 1. 2.
Unless the methods of financing are changed and the facilities, particularly relating to the technological improvement, are made available to the borrowers, the borrowers belonging to the RT/SB/PSE/TO category are not likely to benefit through the Telangana Grameena Bank loan schemes. 2. The financing of the Telangana Grameena Bank has helped the borrowers in a number of ways, apart from improving their incomes, e.g.
it has helped them in finding occupations in their own villages, which has resulted in reducing the migration. 3. The borrowing requirements of the people are still not adequately met by the Telangana Grameena Bank, which is evident from the amounts of loans taken by the borrowers from various sources.
This indicates that the Telangana Grameena Bank must change its financing pattern and also streamline its operations in such a way so as to suit the needs of the people. The Telangana Grameena Bank is successfully working in the Telangana region here the theses concentrating on the giving loans to regional farmers for agriculture development 2. REVIEW OF LITERATURE The present Chapter examines and reviews the Literature pertaining to various concepts on the Regional Rural Bank.
The review of literature is given in two elements Banks loan provisions and second half deals with, the studies associated with varied problems comes into Agricultural loan. The literature obtainable within the operating and performance of RRBs in Asian country could be a very little restricted. The literature obtained by investigators within the variety of reports of assorted committees, commissions and dealing teams established by the Union Government, NABARD and bank of Asian country, the analysis studies, articles of researchers, bank officers, economists and therefore the comments of economic analysts and news is shortly reviewed
Hazari, (1976), through his article created a trial to check the participation of Rural Regional Banks in rural development by introducing the conception of command space development. He declared that for the integrated development of an area, it's necessary to channelize the amenities to the teams of farmers rather than entirely reckoning on individual farmer.
Dutta, (1977), in his paper has evaluated the workings of RRBs in the preliminary amount of 1975 and 1976 by studying the expansion within the style of Rural regional Banks, branches, deposits, and advances. He has created an effort to match the various activities of Rural Regional Banks, primary co-operative and industrial banks about interest, loan disbursement, overhead etc. He found that the price of funds is essentially high for the RRBs, as they pay higher rate of interest than the industrial banks.

On the opposite hand, they lend at rates of interest cherish those charged by primary co-operatives. The Committee on the Functioning of the general public Sector Banks beneath the billet of James rule, (1978), found RRBs to be helpful and most popular its growth within the rural areas to the growth of the agricultural branches of economic banks.

Some relevant section of the report discovered that “Rural Regional Banks will play a major role within the finance of the agricultural sector. RRBs mustn't solely open a lot of branches within the rural areas however additionally bit by bit take over the prevailing rural branches of economic banks. Consequently all public sector banks and enormous non-public sector banks and enormous non-public sector banks ought to be allowed to open branches solely up to the district headquarters/ Mandal Unblock level”. The unit on Multi Agency Approach in Agricultural Finance, (1978), beneath the position of C.E.

Kamath has created some relevant observations on the role of the RRBs. in step with them, the role of the RRBs is to supplement and to not replace the opposite institutional agencies within the field of rural credit It extra cautioned that the RRBs of their direct lending shouldn't input in to competition with the co-operatives.

The Kamath cluster clearly most well-liked the RRBs to the business banks for the longer term enlargement of banking in rural areas. It additionally favored the concept of permitting the RRBs to apportion a section of their total loans to the big and medium farmers. The Committee got wind of by the depository financial institution of Asian nation in (1977), to review the operating of Rural Regional Banks for analysis of the performance of the RRBs within the lights of objectives that they were got wind of, indication of their precise role on the agricultural credit structure and creating recommendations with relevancy the scope, strategies and procedures of their functioning.

The committee came to the conclusion that inside a brief span of 2 years, they need incontestable their capability to serve the aim that they were established so, the program for the institution of a lot of Rural Regional Banks deserves to be accelerated. The committee on Rural Regional Banks habitual by the depository financial institution of Asian nation conducted a study on the viability of Rural Regional Banks (1979).

It discovered that it had been out of the question for all branches to become viable as a result of some branches were set at centers wherever the potential had been restricted. Some branches couldn't expand their business attributable to keen competition from branches of economic and co-operative banks. Kurulkar and Dogirikar, (1980), in a very examine on Marathwada regional Rural bank have discovered that principal percentage of the beneficiaries belonged to landless class, observed by little and marginal farmers.

The study discovered that there's a declining trend within the flow of credit to those weaker sections and suggested for reconsideration of lending policies of the bank. Patel and Shete, (1980), of the National Institute of Banking Management created avaluable analysis of performance and prospects of RRBs. They additionally gave a comparativepicture of performance in deposits, branch enlargement and credit preparation of the cooperativebanks, business banks and RRBs in a very specific space. This was a watch opener formany researchers engaged during this field of rural credit.

Rao, (1980), has made a observe of the impact of programmes on track organization based on the overall performance of SreeVisakhGramin bank (SVGB). He decided on branches of SVGB, specifically, Kalingapatanam and Rajam to symbolize irrigated and non-irrigated areas respectively. He found that the net return from credit score is appreciably higher besides for business pastime inside the irrigated vicinity than the non-irrigated location.
The acquisition of assets has been found additional in classes wherever loans area unit provided within the sort of assets itself. He complete that economical work culture of the bank employee is that the main reason for such tremendous success. C.D. Wadhava, (1980), carried out a case examine of two Rural regional Banks working in Haryana and Rajasthan in 1977.

He found that Rural Regional Banks transmitted difficult procedural formalities from their sponsor banks and additionally the Rural Regional Banks weren't ready to meet the targeted disbursement of credit set by the govt of India. The study attributed restricted scope of direct disposal by Rural Regional Banks within the areas of operation, absence of effective links with primary co-operative societies and farmers service societies and lack of adequate support from the govt for increasing business resulted within the setting-up of Rural Regional Banks.

Purushothaman Nair and GovindanKutty, (1981), have created an impression study South Malabar Gramin Bank (SMGB). The study found that the bank has stood the take a look at of your time and proved to achieve success as rural savings mobiliser. The bank accounts grew by 100% of the mixture deposit accretion within the rural and semi-urban centers of industry in its space.

Regarding the deposit promoting methods, the study expressed that no matter quantity of deposit is mobilized by the bank is while not drive for it. The study discovered that the bank has created a positive impact on the lifetime of the poor mass within the rural areas. it had been detected that with somewhat additional effort and substance the bank would be ready to do far more in sound savings from the general public.

The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD), (1982), examined the role of Rural Regional Banks within the rural system and counseled that, as Rural Regional Banks were additional appropriate for rural development work, preference ought to incline to Rural Regional Banks in relation to licensing of branches within the rural areas.

The committee additionally counseled that Rural Regional Banks ought to still confine their operations to the weaker sections. The Study by Abdul Noorbasha and Dakshina Murthy, (1984), found that Rural Regional Banks had shown a bent to grow and cater to the wants of weaker sections. The study additionally found that Rural Regional Banks establish themselves because the good matching credit agents of the agricultural sector, compared to the than that of the industrial banks.

The Government of India appointed a social unit on RRBs, (1984), below the spot of ShriKelkar to check the operating of the RRBs terribly} very comprehensive manner. The committee has shown full awareness of the essential drawback of the RRBs and has expressed that “credit establishments, that begin showing strains of non-viability, can not be allowed to continue within the gift kind and necessitate a significant review of their structure”.

After elaborate review of the operating of the RRBs the Kelkar Committee came to the basic conclusion that “in read of its massive branch network, relatively lower price of operation, native involvement through applicable staffing pattern, and their operations additional in tune with the national objective of serving the weaker sections comprising tiny and marginal farmers, artisans, village and bungalow industries, the RRBs as {a part|a neighborhood|an area unita|a district|a region|a locality|a vicinity|a section} of the multi-agency approach to rural credit are eminently appropriate to try and do the duty envisaged for them.

Further, as district level organizations, they'll be trusty to require banking nearer to the agricultural households and guarantee effective supervising over the tip use of credit. The RRBS will exist aspect by aspect with the cooperatives and industrial banks enjoying a supplementary role to every alternative.” Hindu deity N., (1984), in an exceedingly study on Rural Regional Banks in West Bengal found that the recovery work of due loans in conjunction with the traditional work of process new credit proposals and accomplishment new borrowers hardly allowed the bank officers any time for guiding them in adopting improved farming techniques and creating higher use of credit R.K.

Singh and K.M. Upadhyay, (1984), have conducted “A study of loan recovery of Rural Regional Banks in Bihar”. They analyzed the extent of recovery of loans, reasons for over dues and measures for improvement in recuperation of loans. Their study discovered that the recovery performance of the RRBs in Bihar declined unendingly throughout the amount 1978-80.

In the opinion of managers, AN inadequate arrangement for recovery was the foremost necessary reason for the low recovery. the foremost necessary reason for over dues indicated by borrowers was the shortage of funds to repay the loans either because of failure or because of expenditure on wedding ceremonies or alternative social functions or ill health of members of the family. Borrower's additionally supported the read of managers relating to low recovery.

In the opinion of borrowers inadequate follow up by banks for reimbursement and willful default were additional or less equally necessary reasons. the foremost necessary measures for rising the recovery performance as recommended by managers area unit disposal in clusters, timely reminders to borrowers, tie-up arrangements with, promoting agencies, support from Government authorities and legal proceeding against willful defaulters.

Sudhakar, (1984), evaluated the performance of CaurveyGrameen Bank of Mysore district compared with Primary Agriculture Co-operative Societies. it had been found that the performance of Rural Regional Banks was higher than PACS with relevance deposit mobilization, credit preparation, and timely sanction of loan and adequacy of loan quantity. The Regional Rural Bank branches were earning profit whereas PACS were running on “no loss no profit” basis.

This clearly shows the viability of RRBs and also the study counseled increasing the branches in alternative areas. Jagdish Prasad and Sunil Kumar, (1985), of their take a look at on function of Rural nearby Banks in Bihar located that the function of bank in covering the weaker sections of borrowers was satisfactory. The study additionally discovered that the bank had coated larger range of tiny and marginal farmers whereas disposal to the farming community.

Another necessary finding of the study was that loans given to the poor were typically accepted as a dole or relief programmes that was acknowledged because the main reason for poor reimbursement. Balishter, (1986), undertook a study to judge the performance of the JamunaGraminbank . (Now ShreyasGramin Bank, sponsored by geographical region Bank, came into existence on first June 2006 once consolidation of 3 RRBs i.e.

Aligarh Gramin Bank, EtahGramin Bank &JamunaGramin Bank vide Govt. of India Notification No. F. No. : 1/4/2006-RRB (i) dated first June 2006). On the idea of the operating results of the bank, it had been complete that, within the event of future growth of rural banking, larger importance ought to incline to the extension and strengthening of the network of Rural Regional Banks beside the growth of branches of economic banks.

Khanderwal, (1986), has created a shot to specialize in the matter space in personnel management within the RRBs. He additionally puts forward some suggestions for improvement of their personal policies. In 1986, NABARD printed “A Study on RRBs Viability”, that was conducted by Agriculture Finance Corporation in 1986 on behalf of NABARD.

The study discovered that viability of RRBs was basically dependent upon the fund management strategy, margin between resources quality and their preparation and on the management exercised on current and future prices with advances. The proportion of the institution prices to total price and growth f branches were the essential factors, that affected their viability.

The study any complete that RRBs incurred losses because of defects in their systems intrinsically, there was ought to rectify these and build them viable. the most suggestions of the study enclosed improvement within the infrastructure facilities and gap of branches by industrial banks in such areas wherever RRBs were already in perform.

Nagi Reddy and Rathnakumari, (1986), in their study on credit reimbursement performance of borrowers of RRBs found that the reimbursement performance is best among tiny farmers and agricultural labourers. They complete that higher yields, need to induce future loans, persuasion by bank officers etc. area unit the most reasons for prompt reimbursement. Raveendan, (1986), created a shot to check the issues of agricultural credit recovery of North Malabar Grameena Bank.

It was found that there was never-ending increase within the quantum of economic help for agriculture and allied activities over the years. The study discovered that the bank was taking ample interest within the upliftment of scheduled caste and tribes and also the finance has reduced their dependence on cash lenders. however the recovery performance of the bank wasn't satisfactory.
Dinabandu, (1988), made a study of Bhadrak block of Orissa and compared the cost incurred in borrowing by the farmers from Rural Regional Banks and co-operative societies. The study revealed that for obtaining a loan of Rs. 100 from a Rural Regional Banks and cooperative society, the borrowers had to incur a cost of Rs.19.06 and Rs. 18.54 respectively, which measured to be high.
Therefore, to reduce the cost of credit, it was suggested that the monetary institutions, especially, the Rural Regional Banks should agree to simplified procedures of lending and disburse the loans on time at the beginning of the crop season. Naidu and Naidu, (1988), evaluated the impact of the Rayalaseema Grameen Bank on income, profit and employment of various categories of beneficiaries.
They found that the financial gain of beneficiaries has redoubled to an excellent extent between pre-loan and post loan periods. The study additionally discovered a positive impact in man-days of employment or little and marginal farmers and landless labourersL.k Naidu, (1998), performed a look at on RRBs taking a pattern of forty eight beneficiaries of rural artisans in Cuddapah district of Andhra Pradesh state under RayalaSeema Garmin bank institution. during this study, it absolutely was complete that the beneficiaries were ready to realize a rise in their financial gain owing to the finance provided by the bank.

Parmer, (1988), assessed the performance of Mehsana Grameen Bank in Gujarat. They found that, the amount of branches, deposits, advances per branch ANd advances per capital were found to be in an increasing trend. Agriculture received a lion's share, particularly crop loan, that was an honest sign for the event of banking sector.

Rao, (1988), in a writing examined the inherent issues of Rural Regional Banks.Since there area unit completely different agencies like depository financial institution of India, commercial bank for Agriculture and Rural Development (NABARD), sponsor banks, Government of India, etc., to regulate the Rural Regional Banks, many choices area unit delayed for wish of clearance by one when the opposite agencies involved.
So, the study suggested amalgamating all the existing rural regional banks to form a single rural national bank under the single agency. K. Uma, Mahesh Patnaik and M. SundaraRao, (1989), conducted a research study on the “Impact of Shri Visakha Grameena Bank on beneficiary households”. Their study exposed that the impact of Shri Visakha Grameena Bank on the selected beneficiary households is significant in terms of increase in their investments, income levels, consumption position and promotion of family employment.
A horizontal shift in the distinction of beneficiaries from the low income groups is noticed and relatively higher income groups are experiencing lower growth rates of returns compared to lower returns groups. Sangwan, (1989), in his study has made an attempt to identify the factors affecting viability with special references to RRBs in Uttar Pradesh.
The study exposed that the profit making RRBs preferred to invest more of their deposits at call market and short notice market rather than loans and advances to weaker sections which imply lack of profit incentive in rural lending. In the research study by N. B. Shete and G. L. Karkal, (1989), who belong to the National Institute of Bank Management, Pune, Maharashtra, critically analyzed the genesis of RRBs, their geographical dispersion, the role of sponsoring banks, business performance and financial performance of the RRBs in the country.
Their study clearly shown that there are inter regional and interbank variations in the progress and performance of the RRBs, but the RRBs have not neglected the backward states and regions in spreading the banking services and in serving the rural and tribal population. They suggested preventive and curative measures to deal with the problem of over dues of the RRBs and they warned that if these measures are not taken, then the time will not be too far away to think again of creating another new financial institution to supply credit to the rural activities.
They have been successful in proving that the performance of the RRBs in terms of profit or loss is not related significantly to the business variables. Kalkardrikar, (1990), has made a examine to study the operating of RRBs and to evaluate the contribution of these establishments for monetary development of Karnataka stateThe study used survey technique and case study method.
While tracing the genesis and rationale of RRBs scheme, the features of the scheme including the objective, functional aspects and its role in the rural credit market are documented in the study. The act of RRBs in the state has been reviewed with quantified parameters like branch growth, deposit accretion, credit deployment and profitability and their comparison with RRBs in the nation is also made. D. J. Kanvinde, (1990), in his paper on the RRBs discussed certain basic issues.
They examined the role of RRBs, achievements of the RRBs, implications for branch expansion and viability of the RRBs. He concluded his study by saying that if the RRBs have to remain “small man oriented” credit institutions and still retain long term viability and strength, a closer look at the policy of administered rates of interest would probably be inevitable. Subsidies at best can be a short-term phenomenon.
Velayudam and Sankaranarayanan, (1990), examined the various aspects of RRBs like growth performance, problems of recovery, mounting losses, viability, management problems, etc. After examining these aspects they drew inferences to aid policy formulation in the light of the recommendation of various committees like Kelkar working Group 1986, Khusro Committee 1987, etc.
The study focused on the need for set up of RRBs in under banked and banked regions of the country and to function in remote rural areas which lack basic amenities like education, medical help, transport and communications. Vyas, (1990), in his study, after tracing the evolution of RRBs in India and development of RRBs in Rajasthan, has tried to have a look at the managerial performance of RRBs inside the nation.