A recent press report said that in an attempt to extend the reach of banks in rural and semi-urban areas, the finance ministry has asked public sector banks to integrate their operations with regional rural banks (RRBs).
Reports said that the charges for various banking services used by customers of RRBs are to be aligned with the sponsoring banks and the cheques or drafts issued by RRBs should be treated at par with their sponsoring bank.
Reports also said that the government expects RRBs to offer more, and quicker, loans to borrowers in India’s hinterland as part of its financial inclusion drive. It wants RRBs to disburse at least Rs. 51,000 crore worth of loans, or 10.7% of the 475,000 crore lending target it has set for public sector banks for the current fiscal. The rural banks are involved in offering home loans, personal loans, agriculture loans, vehicle loans, business loans, loans to SHGs etc.
Rural banking in India started since the establishment of banking sector in India. Earlier Rural Banks were mainly focused upon the agro sector. These banks are found in every corner of the country and extended a helping hand in the growth process of the country.