The RBBs Act has made various provisions regarding the incorporation, regulation and working of RRBs. According to this Act, the RRBs are to be set-up mainly with a view to develop rural economy by providing credit facilities for the purpose of development of agriculture, trade, commerce, industry and other productive activities in the rural areas.

Such facility is provided particularly to the small and marginal farmers, agricultural labourers, artisans, and small entrepreneurs and for other related matters.

The objectives of RRBs can be summarized as follows:

(i) To provide cheap and liberal credit facilities to small and marginal farmers, agri­culture labourers, artisans, small entrepreneurs and other weaker sections.


(ii) To save the rural poor from the moneylenders.

(iii) To act as a catalyst element and thereby accelerate the economic growth in the particular region.

(iv) To cultivate the banking habits among the rural people and mobilize savings for the economic development of rural areas.

(v) To increase employment opportunities by encouraging trade and commerce in rural areas.


(vi) To encourage entrepreneurship in rural areas.

(vii) To cater to the needs of the backward areas which are not covered by the other efforts of the Government?

(viii) To develop underdeveloped regions and thereby strive to remove economic dispar­ity between regions.