Narashima committee established regional rural banks according to the needs of the rural area, the committee felt that RRB would be much better for the rural population than commercial banks or any other commercial bank. considering all of the above, the government decided to pass the Regional Rural Banks Act of 1975. This law led to the formation of 25 regional rural banks in the same year. There are currently 196 regional rural banks in the country. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get Original Essay The main objective and function of regional rural bank is that in rural areas there are not many commercial banks, their main purpose was to develop a commercial organization to the rural mass which should succeed the regional rural bank. The incorporation of regional rural banks produced numerous regulations that would help the development of the country's economy by providing credit to rural farmers, trade, etc. The functioning of rural banks is limited to certain areas and different districts of different states of the country, it is usually found in the district heads of different states, RRB has been regulated and formulated by NABARD under the governance of the central government and other commercial sponsor banks . Each regional rural bank in the country has been sponsored by one or the other public sector bank. It is the duty of public sector banks to provide necessary aid and assist regional rural banks, these public sector banks help in training and development of RRB employees, they also help in underwriting the quota and also provide necessary managerial direction and financial aid . But the management or financial assistance will be provided for a period of 5 years and not beyond this period it can be increased with the approval of the Central Government and the respective state along with the norms of NABARD. The capital requirement of the regional bank has been provided by the central government, state governments and some sponsored public sector banks with an amount of 5crors, this capital amount is in the ration of 50% has been contributed by the central government, 35% sponsored by public sector banks and 15% by state government. All regional rural banks in the country are authorized to carry out their business transactions as per the ACT Banking Regulations, 1949. RRB provides all the important services provided by national banks to the rural population such as providing advance loans, credit, accepting deposits and providing remittances to the population rural, apart from also investing in other banks and various types of financial institutions prescribed under ACT and NABARD banking regulations, also invest in government securities. The DICGC schemes have been followed by RRB which also observes the cash reserve ration and statutory liquidity ratio of regional rural banks stipulated by the Reserve Bank of India. The Reserve Bank of India has placed regional rural banks in the priority sector after 1997, commercial banks should provide 40% of their net bank credit to the priority sector, similarly regional rural banks should also provide 25% of their public credit. sector banks advance as reserve or provide 10% of their net bank credit to the weaker sections of the societies, RRBs are also sponsored by commercial banks for which notification must be received from the central government, regional rural banks can open their branches in the states as well as in other states and deal with the rural people of other states. At the moment the maximum coverage of the banks.