Q. With reference to the Regional Rural Banks (RRBs), consider the following statements:
1.RRBs are 100% owned by the central government.
2.National Bank for Agriculture and Rural Development (NABARD) is responsible for refinancing RRBs.
Which of the statement(s) given above is/are correct?
Answer: B
Notes:
Explanations –
Statements 1 is incorrect. The ownership structure of RRBs is divided among three entities: the Central Government holds a 50% stake, the Sponsor Bank holds 35%, and the State Government holds 15%. They primarily serve rural and semi-urban areas, focusing on small and marginal farmers, agricultural laborers, artisans, and small entrepreneurs.
Statement 2 is correct. NABARD provides refinance support to Regional Rural Banks, among other financial institutions, to help them extend credit for agricultural and rural development activities. The RBI is the primary regulator of RRBs, overseeing their banking operations and ensuring they comply with banking regulations.
Source: The Hindu
