Role of RRBs in the Rural Economy


The Institute of Banking Personnel Selection (IBPS) is an autonomous recruiting agency in India, established in 1975. Formerly the institution was known as Personnel Selection Service (PSS); in 1984, it was deemed to be a self-regulating body under the jurisdiction of RBI and PBS (Public Sector Banks). The goal was to develop it as an autonomous research-oriented, and academic institution to enrich human resources in the banking industry. In 2011 IBPS notified about a common written examination (CWE) for the purpose of recruiting banking employees for public sector banks.


IBPS notify about the date of the IBPS RRB PO examination on their official website, and exams are scheduled in various centres across the country. The following public sector banks participate in the recruitment of probationary officers, clerical, and specialist officers. The Regional Rural Banks (RRBs) also take part in the recruitment of scale I, II, and III officers. Regional Rural Banks (RRB) is scheduled commercial banks offering basic banking service to the rural population of India. These banks were established to render service to the underprivileged and economically backward rural population.

Objective of RRBs

They operate at regional levels in various Indian states. The prime objective is to provide financial aid and loan to marginal farmers, artisans, and agricultural labourers to stimulate local inclusive economic growth. As of now, there are forty-three RRBs operating in various states under the aid of the Government of India, State Governments and sponsoring banks. Rural development has a predominant role in the overall socio-economic growth of India. The rural industry offers a maximum number of employment and impacts other industry sectors directly and indirectly. Free-flowing rural finance is essential for rural growth and to save the rural population from the clutches of money lending sharks as they charge exorbitant interest rates. The marginal farmers also need agricultural insurance as most of them to depend on monsoon and also face various problems due to insufficient fertilizer, seeds and irrigation.

The authorized capital of one crore

RRB was formed on 2nd October 1975 with an objective to provide credit lines and finance to small, marginal farmers, rural artisans, and small entrepreneurs to develop trade and commerce, agricultural activities and other rural productive programs. The RRBs provide finance for rural oriented growth at the grass-root level. In 1975 the Narsimham Committee suggested the formation of rural banks to facilitate local growth in rural areas and to resolve local problems of rural people with understanding and compassion for the rural perspective. Initially, five RRBs were formed with an authorized capital of one crore, later augmented to five crores. Five commercial banks, namely, State Bank of India, Syndicate Bank, United Bank of India, United Commercial Bank and Punjab National Bank, sponsored these RRBs.

 The Eligibility

The candidates aspiring for IBPS RRB PO posts must be a citizen of India, Nepal, Bhutan or a refugee from Tibet exiled before 1st January 1962. Persons of Indian Origin who migrated from East African nations, Pakistan, Sri Lanka and Burma with a valid certificate of eligibility issued by GoI can apply for the vacant posts. The candidate must be above eighteen years and below thirty years. There is certain age relaxation for SC/ST, OBC and PWBD candidates.