Q. With reference to the Regional Rural Banks (RRBs) in India, consider the following statements:
1.RRBs were established to provide concessional credit to weaker sections and mobilize rural savings for productive use.
2.The shareholding pattern of RRBs includes contributions from the Central Government, State Government, and sponsoring bank in a 50:15:35 ratio.
3.As per government reforms, RRBs are now allowed to lend only to weaker sections and at concessional interest rates.
Which of the statements given above is/are correct?
Quarterly-SFG-Jan-to-March
Red Book

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: A
Notes:

Explanation:

  • RRBs were created in 1975 with twin objectives — to provide concessional credit to weaker sections and mobilize rural savings for productive rural activities.
  • The shareholding is split as:
    • Government of India – 50%
    • State Government – 15%
    • Sponsoring Nationalised Bank – 35%
  • As per post-1990s reforms, RRBs are no longer obligated to lend only at concessional rates or only to weaker sections — they can lend at commercial interest rates to any borrower.

Source- 11th NCERT: Economics: Indian Economic Development and TMH Indian Economy by Ramesh Singh

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