Explanation:

• The Regional Rural Banks (RRBs) were first set up on 2 October, 1975 (only 5 in numbers) with the aim to take banking services to the doorsteps of the rural masses specially in the remote areas with no access to banking services with twin duties to fulfill To provide credit to the weaker sections of the society at concessional rate of interest who previously depended on private money lending, and To mobilize rural savings and channelize them for supporting productive activities in the rural areas.
• The Government of India, the concerned state government and the sponsoring nationalized bank contribute the share capital of the RRBs in the proportion of 50 per cent, 15 per cent and 35 per cent, respectively. The area of operation of the RRB is limited to notify few districts in a state.
• Following the suggestions of the Kelkar Committee, the government stopped opening new RRBs in 1987-by that time their total number stood at 196. Due to excessive leanings towards social banking and catering to the highly economically weaker sections, these banks started incurring huge losses by early 1980s.
• For restructuring and strengthening of the banks, the governments set up two committees-the Bhandari Committee (1994–95) and the Basu Committee (1995–96).

Source: ForumIAS