Indian Banking System Structure

RRBs are regulated by the Reserve Bank of India (RBI).

The Central Government holds a majority stake in each RRB, exceeding 50% of the total shares.

The State Government's shareholding in an RRB cannot be reduced below 15% under any circumstances.

The first RRB, Prathama Bank, was established in the state of Uttar Pradesh.

The Vyas Committee, established in 2001, was primarily concerned with improving the credit flow to the agricultural sector.

RRBs are exclusively authorized to offer loans to small and marginal farmers, excluding other segments.

M Swaminathan is credited with the establishment of the RRB model of banking.

RRBs are subject to the same income recognition and asset classification norms as commercial banks.

The Narasimham Committee II described Universal Banking as a concept distinct from Narrow Banking.

Development Financial Institutions (DFIs) should not be converted into commercial banks as per the recommendations of the Khan Working Group.

ICICI Bank was one of the last financial institutions in India to adopt universal banking.

Wholesale banking services are generally provided to individual customers.

Investment Banking Services include asset management and mergers and acquisitions.

Retail banking is the least common type of universal banking service available globally.

The RBI established a Working Group to review the role of Development Financial Institutions and commercial banks in 1997.

The RBIA policy is formulated with the approval of the Board and shared within the organization.

The feedback on the RBI's Discussion Paper indicated that universal banking was fully accepted without any concerns.

Quantitative assessments are primarily used to evaluate the effectiveness of control systems in risk assessment.

NBFCs face risks primarily due to their limited access to public funds.

Universal banks provide a variety of financial services, including tailored investment services.

The risk assessment process includes identifying inherent business risks associated with various activities.

Universal banking is limited to retail banking services without additional authorities.

The ongoing evaluation of NBFC regulations ensures they can meet the systemic impacts they may cause.

Interest rate movements are considered a risk factor for universal banks.

Loans to co-operative societies of farmers for the purchase of members' produce can be up to ₹ 10 crore.

Small and Marginal Farmers (SMFs) include landless agricultural laborers.

Micro Enterprises are classified based on having an investment in plant and machinery of less than ₹ 5 crore.

Loans for food and agro-processing can be sanctioned up to ₹ 200 crore per borrower.

Small Enterprises have a turnover limit of less than ₹ 50 crore.

Export credit is applicable to Regional Rural Banks (RRBs) and Local Area Banks (LABs).

Loans to Self Help Groups (SHGs) must adhere to land holding criteria for individual farmers.

Medium Enterprises can have up to ₹ 250 crore in turnover.

Export credit for foreign banks with less than 20 branches can be classified as priority sector up to 40% of ANBC or CEOBE.

Loans up to ₹ 20 lakh for educational purposes are eligible for priority sector classification.

Housing loans to bank employees are eligible for classification under the priority sector.

Bank loans for the construction of dwelling units for governmental agencies can be classified as priority sector regardless of carpet area.

A metropolitan area is defined as a location with a population exceeding 10 lakh.

Loans for building health care facilities in Tier II to Tier VI centres can go up to ₹ 10 crore per borrower.

The overall cost of a dwelling unit for priority sector housing loans in metropolitan areas can be up to ₹ 60 lakh.

Bank loans for affordable housing projects are eligible for priority sector classification with a carpet area of up to 60 sq.m.

The first phase of amalgamation of RRBs was initiated in 2005 and the second phase took place in 2012.

As of 31 March 2015, the total number of RRBs was reduced to 196.

Dr. K.C. Chakrabarty Committee recommended recapitalization for only 40 RRBs out of 82.

The Regional Rural Banks (Amendment) Act, 2015, allows RRBs to raise capital only from existing shareholders.

The authorised capital for RRBs as per the Amendment Act is Rs. 2,000 crore.

The combined shareholding of the central government and sponsor bank in RRBs must be at least 60%.

The central government can reduce the shareholding limit of the central government in RRBs without consulting the state government.

The RRBs' number of branches increased to 20,024 as of 31 March 2015.