Management and Operations of Regional Rural Banks: Two Case Studies

The setting up of the regional rural banks (RRBs) in India for mainly financing the credit requirements of the weaker sections of the rural society has been a significant innovation in the field of banking. The difficulties of undertaking a definitive and comparable appraisal of the performance of the RRBs make it imperative to conduct case studies of their performance and problems. This paper presents the findings of two such case studies. The banks selected are two of the first five RRBs started on October 2, 1975, namely, the Haryana Kshetriya Gramin Bank, Bhiwani (Haryana) and the Jaipur Nagaur Aanchalik Gramin Bank, Jaipur (Rajasthan). This paper is divided into three parts. Part I describes the setting; Part II deals with the analysis of the working results and Part III lists the major issues which need to be resolved soon for the future of these RRBs. The two case studies presented in this paper do bring out some of the key issues which impinge on their effective working and need to be further examined by the policy makers for deciding the future of these banks. These case studies also point out to the importance of variations in specific local conditions in influencing the working of the regional rural banks. The above studies clearly bring out the need for immediately reorganizing and revitalizing the working of these banks for achieving their objectives. The Dantwala Committee is already at work for examining the working of these banks and suggesting their future set up. It is hoped that the findings of these two case studies will be found to be useful for reviewing the working of such banks and for thinking on their reorganization in the future.