A Study of How Amalgamation of RRB Is Contributing in Making India a Developed Nation

After the nationalisation of banks in 1969 the faith of the general public in indian banking system has became stronger. Due to cultural problems the farmers of the nation can't get lending from commercial banks in an easy way, even after nationalisation. A vital component of the nation's economic development is rural development. The people in rural area comprises of farmers, landless labourers, artisans, retail traders etc. out of 60% of the total population. The main demographic characteristics of rural areas are socioeconomic backwardness, unemployment, and underemployment. As people in the rural area were facing difficulties while procuring loan from commercial bank. As a result government of India to initiative to establish a bank which could provide loans on easy terms to the people of rural area, such kind of bank were known as Regional Rural Bank(RRB). These banks were formed under the Regional Rural Banks Act in 1976 as state-sponsored, regionally based, and rurally orientated organisations, with any one commercial bank serving as the sponsor bank. The indian government began recapitalising the RRBs along with a number of other policy reforms to give them operational independence for boosting their operations and profitability after the RRBs had financial challenges within 20 years. In order to make the functioning of the RRB more effective, The first phase of amalgamation was started in September 2005. After the amalgamation of Regional Rural Banks in India, there has been a rise in advancements in the priority sector. Further, there was a surge in deposit mobilisation from Rs. 64,195 crores in 2006 to Rs. 6,07,540 crores in 2023. RRBs can be made more effective and accessible to a wider audience with the aid of technology and amalgamation. The present study tries to analyse how amalgamation of RRB is contributing in making India a developed nation. For the purpose of research annual reports of NABARD and RBI is taken into consideration. Additionally, various other published sources will be used in this research paper. Keyword: Regional Rural Bank, Nationalization, Amalgamation, Rural Development, Agricultural Producers.