CURRENT AFFAIRS

Detailed explanation-1: -K.C. Chakrabarty. Based on the Committee’s recommendations, a Scheme for Recapitalization of RRBs was approved by the Cabinet in its meeting held on 10th February, 2011 to provide recapitalization support of Rs. 2, 200 crore to 40 RRBs with an additional amount of Rs.

Detailed explanation-2: -Regional Rural banks (RRBs) in India were established by Government of India, under provisions of RRBs Act 1976, enacted by the Indian Parliament.

Detailed explanation-3: -Regional Rural Banks were established under the provisions of an ordinance passed on 26 September 1975 and the RRB Act 1976 to provide sufficient banking and credit facility for agriculture and other rural sectors.

Detailed explanation-4: -The first RRB was created on 2nd October 1975, called the ‘Prathama Gramin Bank’. By 1976, five more RRBs were established, with a total capitalization of 100 Crores. 50% was owned by the central government, 15% by the state government and 35% was owned by the sponsored bank.

Detailed explanation-5: -This recapitalisation (a strategy of enhancing the financial base of an entity to overcome a rough financial situation) would improve their capital-to-risk weighted assets ratio (CRAR) and strengthen these institutions for providing credit in rural areas.