Parliament Passes Amendment to Regional Rural Banks Bill

On April 28th 2015, parliament passed regional rural bank Amendment Bill 2014.The Bill was first passed in Lok Sabha on 22nd December 2014.The Bill amends the Regional Rural Banks Act 1976,has its goal to strengthen RRB or Regional Rural Banks and to deepen their financial inclusion.

• This Bill increases the authorised capital of RRB to 2000crores from 5crores .
• Its divided into 200crores of fully paid share of value Rs10 each.
• According to parent Act, the 5 crore capital of RRB’s is split into 5lakh shares of Rs100 each.
• The authorised capital given by any RRB’s shall not be reduced below Rs one crore and shares in all cases to be fully paid up shares of Rs 10 each.
• As per Bill, the RRbs can raise the capital from sources other than state or central government and sponsored banks.
• As per Bill, anybody who is already a director of RRB won’t be eligible to be on the Board Of Directors of another RRB.
• The shareholders will elect the directors based on the total amount of equity share capital given to such shareholders.
• The directors term or tenure will be 3years from the existing 2years.
• The balance books of RRBs should be closed by December 31st every year as per the Parent Act
  But now as per this amendment act 31st March would be the date to get RRB’s balancing of books in a uniform way.

ABOUT REGIONAL RURAL BANKS

• RRB’s are local level balancing organisations.
• They are created to serve rural India with basic banking and financial services.
• Their main aim is to mobilize funds from semi-urban and rural places and give loans to marginal farmers.
• Kerala Gramin Bank is the India’s biggest RRB situated in malappuram in kerala.
• It has a business of about 20,000 crores.
• Some other examples of RRB includes Allahabad UP Gramin Bank,Karnataka Vilas Grameena Bank,Tripura Gramin Banks etc.