Performance of regional rural banks in India

The importance of the rural banking in the economic development of a country cannot be overlooked. As Gandhiji said “real India lies in villages,” and village economy is the backbone of Indian economy. Without the development of the rural economy, the objectives of economic planning cannot be achieved. Hence, banks and other financial institutions are considered to be a vital role for the development of the rural economy in India. Regional Rural Banks (RRBs) were established in October 2, 1975 and are playing a pivotal role in the economic development of the rural India. The main goal of establishing Regional Rural Banks in India is to provide credit to the rural people who are not economically strong enough, especially the small and marginal farmers, artisans, agricultural laborers and even small entrepreneurs. This paper attempts to analyze the financial performance of RRBs in India during the period 2009–10 to 2011–2012. The study is based on secondary data collected form annual reports of NABARD and RBI. An analytical research design of Key Performance Indicatorssuch as number of bank branches, deposits, loans,loans, investments and growth rate index is taken for the present study. The study is diagnostic and exploratory in nature and makes use ofsecondary data. The study finds and concludes that performance of RRBs has significantly improved.