A DISSERTATION REPORT ON A STUDY ON THE

PERFORMANCE OF RURAL BANKING IN INDIA: A

SPECIAL CASE STUDY ON RUSHIKULYA GRAMYA BANK
IN GANJAM- DISTRICT, ODISHA

Submitted towards the partial fulfillment for the award of the degree of

Bachelor of Business Administration

BY

ANISH NAYAK

ROLL NO- 011805BB009

PROJECT GUIDE

DR.KAILASH DIWAN

BERHAMPUR, GANJAM

1
 CERTIFICATE

This is to certify that this Project Report entitled ‘Stress management with respect to

Syndicate Bank is the result of research work carried out by Mr. ANISH NAYAK under the

guidance and supervision of. Mr. DR.KAILASH DIWAN.

Signature

DR. KAILASH DIWAN

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 ACKNOWLEDGEMENT

The project work is pursued as a part of BBA curriculum at Berhampur University,

Berhampur. I would greatly rejoice to express emphatically with profound sense of gratitude
and highest veneration, my sincere thanks to Dr.Kailash Diwan for giving me guidance for
this Project.

I am very much thankful to my Prof. Uttama Jena ,Principal, Khallikote Autonomous

College and all my college lectures and staffs for their help and support.

I am short of words to express my respect & honor to my parents and family members &
friend who showered their blessings, affection, encouragement, & inspiration, without which
this report would not have been finalize.

I also express my sincere thanks to my friends who helped me differently in the completion
of my work.

Last but not least, I also thank all those people whom I met at my research work during my
internship and helped me to accomplish my assignments in the most efficient and effective
manner.

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 DECLARATION

I, ANISH NAYAK, hereby declare that the project report on “A STUDY ON THE

PERFORMANCE OF RURAL BANKING IN INDIA: A SPECIAL CASE STUDY ON

RUSHIKULYA GRAMYA BANK IN GANJAM-DISTRICT, ODISHA” is a result of my

own work and my indebtedness to other work publications, if any, have been duly

acknowledged.

Place: BERHAMPUR Signature

Date: 12.05.2021 ANISH NAYAK

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 CONTENTS
1. INTRODUCTION TO THE STUDY

2. LITERATURE REVIEW OF THE STUDY

3. OBJECTIVE OF THE STUDY

4. SCOPE OF THE STUDY

5. RESEARCH METHODOLOGY

6. DATA ANALYSIS

7. FINDINGS AND SUGGESTIONS/RECOMMENDATIONS

8. CONCLUSIONS

9. BIBLIOGRAPHY

10.REFERENCES

11.A SPECIAL CASE STUDY ON RUSHIKULYA GRAMYA BANK IN

GANJAM District, ODISHA

5
 1. INTRODUCTION TO THE STUDY :-

Rural banking in India has been the subject of study Survey Committee Report in 1954,
literally thousands of reports have examined and investigated the problems relating to the
credit delivery for agriculture and rural area. Latest magnum opus on the subject is the
National Agriculture Credit Review report 2000. The Expert Committee on Rural Credit
submitted its report in 2002.One more High Power Committee headed by Professor Vyas
set up by the Reserve Bank of India recently to review and advice on improving credit
delivery to agriculture has also given its report. As the majority of the Indian population
lives in rural areas, there is an urgent need to deliver citizen services to them in a cost
effective way with assured quality. This involves mainly the following: 7. Enabling the
ready access at the place of the villagers. 8. Reducing transaction cost to make the
services affordable. 9. Reduction in delays. 10. Improving the quality of services
available. The criticality of this need may be seen from the fact that even with concerned
and extensive attempts to meet the credit needs of the farmers for agricultural operations
etc., informal agencies including money lenders are currently providing substantial
portion of the total credit to this sector. Besides, the agricultural credit flows themselves
are inadequate and the gross capital formation can be improved only if substantial amount
of investment funds flow to the rural areas in the form of credit. Likewise, there is also a
need to provide market information, extension services, marketing support and
government and other public services to the people in a costeffective manner.

IMPORTANCE OF THE STUDY :-

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 1. Reduce rural and urban gap by mobilising financial resources and services to
rural regions. 
2. Regional Rural Banks pave the way for inclusion of the marginal population like
small farmers, Below Poverty Line (BPL) farmers and workers, small
entrepreneurs, artisans, women, etc.
3. Regional Rural Banks assist rural businesses by providing them short- term loans,
insurance facilities, etc., and help to improve the role of entrepreneurship in
rural areas.
4. Providing assistance like loans, advances, insurance to agriculturists for farming
inputs, equipment, processing, marketing activities, and cooperative societies helps
in the growth of agriculture and the advancement of farmers.
5. Many public and private sector banks do not deal with farmers and rural section
due to their small financial needs, fewer incomes, etc. In such a case, there is a
need for a separate banking system to protect the interests of these sectors. 
6. The RRBs look forward to covering underserved rural areas in terms of
financial services and extending credit assistance.
7. Help in the growth of cooperative societies, agricultural societies, etc.
8. RRBs reduce farmers’ and the weaker sections’ dependence on traditional
sources like moneylenders who exploited them with a high rate of interests on
loans. 

SUMMARY:-

Introduction :-

The villages are the backbone of any country. As far as India is concerned, it is populated
highly with rural mass that undertakes the agriculture and its allied activities at larger
level. The income from these activities occupies more in the Gross Domestic Product of
India. It is well known that the banking system is the heart of any Countries’ economy,
striving to achieve growth and that remain a permanent and dominating factor in the
global competitive business environment. They are having a favourable growth, asset
quality and profitability. To improve the rural credit mechanism cooperative banking

7
sector were also introduced earlier and that was also not in a position to satisfy the rural
needs in terms of money. This inadequate situation led the Government of India to form a
committee to find feasible solution to enable easy rural credit satisfying mechanism. The
committee that headed by Shri. M. Narshimam in the year 1975 came out with its
recommendation to form Regional Rural Banks. In particular, the regional rural bank of
India mainly focuses on supply of credit to the rural people. This paper attempts to study
that the Regional Rural Banks of India satisfies the rural people for their agriculture and
agro-based business financial needs and in turn they earn profit for their activities through
their banking activity.

Need for the study :-

So far, studies have been conducted on Regional Rural Banks based on its profitability
and financial performance as individual, district-wise and state-wise and comparison of
Regional Rural Banks. It is felt to have a study as a whole by considering the banking
activities from bankers’ point of view and customers’ point of view of Regional Rural
Banks and how far it satisfies the either side.

Conclusion :-

Each branch of a bank will have its own importance and significance in providing service.
The target market is entirely different for a rural branch. Hence the services and products
offered are also comparatively different. In India, due to the large rural population, rural
banking is a very important concept in the banking sector. So learning the significance of
a rural branch and how it operates is very important for us to work better in such an
environment. With this Immersion Program, we will have a clear understanding of the
various branch banking products in rural branches, the various services offered, etc.

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RURAL BANKING IN INDIA :-

Rural development occupies a significant place in the overall economic development of

the country. Gandhiji Said ―India lives in Villages‖. He stressed a rural character of
economy and the need for re-generation of rural life. Since independence, it has been
constant endower of our policy maker to give adequate trust to rural development as the
sector is directly related to agriculture. Rural banking in India started since the
establishment of banking sector in India. Rural Banks in those days mainly focused upon
the agro sector. Regional rural banks in India penetrated every corner of the country and
extended a helping hand in the growth process of the country. Till date in rural banking in
India, there are 14,475 rural banks in the country of which 2126 (91%) are located in
remote rural areas. Regional Rural Banks (RRB) were established under the provisions of
an ordinance promulgated on the 26th September 1975 and the RRB Act, 1976 with an
objective to ensure sufficient institutional credit for agriculture and other rural sectors.
The RRBs mobilize financial resources from rural / semi-urban areas and grant loans and
advances mostly to small and marginal farmers, agricultural laborers and rural artisans.
The area of operation of RRBs is limited to the area as notified by Government of India
(GoI) covering one or more districts in the State. RRBs are jointly owned by GoI, the
concerned State Government and Sponsor Banks (27 scheduled commercial banks and
one State Cooperative Bank); the issued capital of a RRB is shared by the owners in the
proportion of 50%, 15% and 35%respectively.

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 2. LITERATURE REVIEW OF THE STUDY :-

A number of studies have been conducted to see the functioning and performance of
regional rural bank in the country. The literature available in the working and
performance of RRBs in India is a little limited. The literature obtained by investigators in
the form of reports of various committees, commissions and working groups established
by the Union Government, NABARD and Reserve Bank of India, the research studies,
articles of researchers, bank officials, economists and the comments of economic analysts
and news is briefly reviewed in this part. Some of the related literatures of reviews are as
follows. The Kelkar Committee (1986) made comprehensive recommendations covering
both the organizational and operational aspects. Several of these were incorporated as
amendments to the RRB Act, 1976 such as:

1. Enhancement of authorized capital of RRBs from Rs 1 crore to Rs 5 crore and paidup

share capital from Rs 25 lakhs to Rs 1 crore.

2. Appointment of Chairman of RRBs by the concerned sponsor bank in consultation with

NABARD.

3. provision of assistance to RRBs in greater measure by sponsor banks in training RRB

staff and giving financial assistance to RRBs in their first five years of their existence.

4. Provision for amalgamation of RRBs in consultation with all the concerned parties.

5. Empowering the sponsor banks to monitor the progress of RRBs and also to arrange for
their inspection, internal audit etc. Though the progress of implementation was tardy (the
amended act came into force only by end-September, 1988), there was enough scope for
improvement thereon. NABARD (1986) published “A study on RRBs viability”, which
was conducted by Agriculture Finance Corporation in 1986 on behalf of NABARD. The
study revealed that viability of RRBs was essentially dependent upon the fund

10
management strategy, margin between resources mobility and their deployment and on
the control exercised on current and future costs with advances. The proportion of the
establishment costs to total cost and expansion of branches were the critical factors, which
affected their viability. The study further concluded that RRBs incurred losses due to
defects in their systems as such, there was need to rectify these and make them viable.
The main suggestions of the study included improvement in the infrastructure facilities
and opening of branches by commercial banks in such areas where RRBs were already in
function. In the year 1989 for the first time, the conceptualization of the entire structure of
Regional Rural Banks was challenged by the Agricultural Credit Review Committee
(Khusro Committee), which argued that these banks have no justifiable cause for
continuance and recommended their mergers with sponsor banks. The Committee was of
the view that “the weaknesses of RRBs are endemic to the system and non-viability is
built into it, and the only option was to merge the RRBs with the sponsor banks. The
objective of serving the weaker sections effectively could be achieved only by self-
sustaining credit institutions.” The Committee on Financial Systems, 1991 (Narasimham
Committee) stressed the poor financial health of the RRBs to the exclusion of every other
performance indicator. 172 of the 196 RRBs were recorded unprofitable with an
aggregate loan recovery performance of 40.8 percent. (June 1993). The low equity base of
these banks (paid up capital of Rs. 25 lakhs) didn't cover for the loan losses of most
RRBs. In the case of a few RRBs, there had also been an erosion of public deposits,
besides capital. In order to impart viability to the operations of RRBs, the Narasimham
Committee suggested that the RRBs should be permitted to engage in all types of banking
business and should not be forced to restrict their operations to the target groups, a
proposal which was readily accepted. This recommendation marked a major turning point
in the functioning of RRBs. The contemporary literature on banking efficiency spells out
two distinct approaches to measure efficiency (1) accounting measure (2) economic
measure. Accounting measure refers to the use of various financial ratios that focus on
one or more outputs and their relevant inputs to measure the performance of a banking
unit. The financial ratio approach has been widely used by the researchers and working
groups/committees to analyze the performance of RRBs. Most of the studies on the
performance evaluation of RRBs concentrated on the banks in particular state/region.
Some of the studies are: Singh (1992) analyzed the performance of RRBs banks in
Punjab. Prasad (2003) evaluated the performance of RRBs in India. Moreover, Pati

11
(2005) developed the performance of RRBs in the north-east region. The study of Bagchi
and Hadi (2006) concentrated on the performance of regional rural banks in West Bengal.
Few studies also exist in the literature which concentrated on the efficiency of a single
regional rural bank. Some of the studies conducted so far are: Sudhaker et al., (1984)
evaluated the performance of Cauvery Grameen Bank in Mysore district; Parmar (1986)
assessed the performance of Banaskantha Mehsane Grameen Bank in Gujarat; Sangwan
(1988) analyzed the performance of Chattanja Grameen Bank in Andhra Pradesh;
Jagadeesha et al., (1990) evaluated the performance of Tungabhadra Garmeen Bank in
Karnataka. Further, Hosamani (2002) explored the performance of Malaprabha Garmeen
Bank in Karnataka and Yadappanvar and Nath (2003) assessed the performance of
Aurangabad and Jalna Grameen Bank in Maharashtra. Though financial accounting ratios
are simple to use and relatively easy to understand, but their use to measure bank
performance is plagued by various problems. As a precautionary measure, regulatory
frame works (such as CAMEL rating) based on these ratios has been put in place in most
of the supervisory systems across the globe. Further, Sherman and Gold (1985) noted that
financial ratios do not capture the long-term performance. This measure also helps in the
analysis of bank’s performance in terms of individual parameters determining the overall
efficiency level as it is difficult to precisely measure the efficiency of banks. Therefore, in
recent years, there is a trend towards measuring bank performance using economic
measure. This measure provides accurate, composite and precise estimate of efficiency of
banks comparing each bank against the top performers in the banking industry. A scan of
the existing literature on the efficiency of Indian banks provides that there exists various
studies that analyzed the efficiency of Indian commercial banks using most popularly
used parametric technique of Stochastic Frontier Analysis (SFA) and nonparametric
technique of Data Envelopment Analysis. The notable studies belonging to this group are:
Noulas and Ketkar (1996), Bhattacharyya et al., (1997), Das (1997), Saha and Ravisankar
(2000), Mukherjee et al., (2002), Kumar and Verma (2003), De Kumar (2004),
Chakrabarti and Chawla (2005), Kaur and Sharma (2005-06), Kumar and Gulati (2008),
etc. To the author’s knowledge, there is virtually no study except Reddy (2005),
Khankhoje (2008), Sathye (2008) and Mohindra (2011) which analyzed the performance
of RRBs by using Frontier and Data Envelopment Analysis approach respectively.

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 3. OBJECTIVES OF THE STUDY :-

The study defines the following objectives:

1. To study the important Role of Regional Rural Banks in the growth of Indian
economy.

2. To analyze the Performance and Functions of Regional Rural Banks.

3. To analyze the developments in Regional Rural Banking in India.

4. To study the rural banking in detail and its current status.

5. To study the challenges faced in rural banking.

6. To study the role of RBI in rural credit.

4. SCOPE OF THE STUDY :-

Scope of the study is to understand the concept of rural banking and what are the
challenges faced in case of rural banking and our scope of the study is limited to few
banks and rural areas. This study is undertaken to analyze the drawback from their
important functions of Regional Rural banks being rendered to the public at present. Here
Rural Banks mean all the banks which are located in the Rural Villages. The total shares
are wholly hold by Government. All Banks functioning as Regional Rural Banks are
taken in to considerations for these studies. The recent performance of RRB‟s have

13
analyzed and bring out the drawbacks in the findings and recommendations chapters for
providing the better services by RRB‟S in our country.

5. RESEARCH METHODOLOGY :-

The financial performance of the RRBs in India has been analyzed with the help of key
performance indicators. The year 2010-2011 was taken as the current year and year 2009-
2010 was base year for the calculation of growth rate. Analytical Techniques
EmployedGrowth rate analysis was undertaken with a view to studying financial
performance related to the RRBs. Growth rate is measured with the help of following
formula-

Growth Rate = Yt -Yt-1 / Yt-1,

Yt= Current Year, Yt-1=Base Year.

 RESEARCH DESIGN
 The present study is diagnostic and exploratory in nature and makes use of secondary
data. The study is confined only to the specific areas like number of branches, district
coverage, deposits mobilized, credits and investments made by the Indian Regional
Rural Banks (RRBs) for the 5 years period starting from 2006-07 to the year 2010-
11.
 METHOD OF DATA COLLECTION
 The present study is empirical in character based on the analytical method. The study
is mainly based on secondary data which is collected, compiled and calculated
mainly from annual reports of the NABARD and RBI. Other related information
collected from journals, conference proceedings and websites.

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6. DATA ANALYSIS :-

Table 1 presents the key performance indicators and growth of RRBs from year 2006-07
to 2010-2011, Graph 1 presents key performance indicators and Graph 2 presents growth
rate of RRBs

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16
7. FINDINGS AND SUGGESTIONS/RECOMMENDATIONS :-

Sources of Funds –
The sources of funds of RRBs comprise of owned fund, deposits, borrowings from
NABARD, Sponsor Banks and other sources including SIDBI and National Housing
Bank.

1. Owned Funds
The owned funds of RRBs comprising of share capital, share capital deposits received
from the shareholders and the reserves stood at 13838.92 crore as on 31 March 2011 as
against 12247.16 crore as on 31 March 2010; registering a growth of 13.0%. The
increase in owned funds to the tune of 1591.76 crore was mainly on account of accretion
to reserves by the profit making RRBs. The share capital and share capital deposits
together amounted to 4273 crore of total owned fund while the balance amount of 9566
crore represented reserves.

2. Deposits
Deposits of RRBs increased from 145035 crore to 166232.34 crore during the year
registering growth rate of 14.60%. Gurgaon GB reported the highest deposit growth rate
of 37%. There are Sixteen (16) RRBs having deposits of more than 3000 crore each.

3. Borrowings
Borrowings of RRBs increased from 18770 crore as on 31 March 2010 to 26490.81
crore as on 31 March 2011 registering an increase of 41.10% . Borrowings viz-a-viz the
gross loan outstanding constituted 26.8% as against 22.7% in the previous year.

Uses of Funds -
The uses of funds of RRBs comprise of investments and loans and advances.

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 1. Investments
The investment of RRBs increased from 79379.16 crore as on 31 March 2010 to
86510.44 crore as on 31 March 2011 registering an increase of 8.98%. SLR investments
amounted to 45022 crore where as non-SLR investments stood at 41488 crore. The
Investment Deposit Ratio (IDR) of RRBs progressively declined over the years from
72% as on 31.3.2001 to 52.04 % as on 31 March 2011.

2. Loans & Advances

During the year the loans outstanding increased by 16098.33 crore to 98917.43 crore as
on 31 March 2011 registering a growth rate of 19.4% over the previous year. Meghalaya
Rural Bank recorded the highest growth rate of 35% during the year 2010-11.

3. Loans Issued
Total loans issued by RRBs during the year increased to 71724.19 crore from 56079.24
crore during the previous year registering a growth of 27.90%. Samastipur KGB reported
highest growth rate of 123% during 2010-11 followed by Andhra Pradesh GVB at 112%.

Working Results

1. Profitability
75 RRBs (out of 82 RRBs) have earned profit (before tax) to the extent of 2420.75 crore
during the year 2010-2011. The profit was marginally lower than the previous year. After
payment of Income Tax of 634.22 crore, the net profit aggregated to 1786.53 crore. The
remaining 7 RRBs incurred loss to the tune of 71.32 crore.

2. Accumulated Losses
As on 31 March 2011, 23 of the 82 RRBs continued to have accumulated losses to the tune
of 1532.39 crore as against 1775.06 crore (27 RRBs) as on 31 March 2010. The accumulated
loss decreased by 242.67 crore during the year under review.

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3. Non-performing Assets (NPA)
The Gross NPA of RRBs stood at 3712 crore as on 31.03.2011 (i.e.3.75%). The percentage
of Net NPA of RRBs has shown an increase from 1.8% to 2.05% during the year. The data
revealed that 15 RRBs had gross NPA percentage of less than 2%, whereas 33 RRBs had it
above 5%.

4. Recovery Performance
There has been an improvement in the recovery percentage during 2009-10 from 80.09% as
on 30 June 2009 to 81.18% as on 30 June 2010. The aggregate overdue, however, increased
by 934 crore to 9805 crore as on 30 June 2010.

5. Credit Deposit Ratio

The aggregate CDR of RRBs increased over the years from 57.10% as on 31 March 2010 to
59.51% as on 31 March 2011. Eight of the RRBs reported CDR of more than 100%.

6. Productivity of Branch and Staff

The branch productivity increased to 16.57 crore in 2010-11 from 14.72 crore in 2009-10
with a growth of 12.57%. Similarly, staff productivity in 2010-11 increased to 3.78 crore
from 3.70 crore in 2009-10 with a growth of 2.16%.

Policy Initiatives during the Year 2010-2011

1. Capital Infusion for improving CRAR

Consequent upon the decision taken in the Finance Minister’s Review Meeting of RRBs
dated 18.08.2009, a Committee was constituted by Government of India, Ministry of
Finance, Department of Financial Services under the Chairmanship of Dr. K.C. Chakrabarty,
Deputy Governor, Reserve Bank of India, to examine the financials of RRBs with reference
to CRAR and suggest a roadmap for achieving a CRAR of 9% by March 2012. As per Dr.
K.C. Chakarbarty Committee Report recapitalization to 40 selected RRBs in 21 states was
started in 2010-11. The recapitalization amount is to be shared by the stake holders in
proportion of their shareholding i.e. 50%, 35% and 15% by Central Government, concerned
sponsor banks and State Government. As per approved scheme, the release of Central
Government share is subject to proportionate share by the Central Government, concerned

19
sponsor banks and State Government. A sum of 66.49 crore was released to 5 RRBs during
2010-11.

 Accepting the recommendations of the committee, the GOI along with other
shareholders decided to recapitalize the RRBs by infusing funds to the extent of 2200
Crore. The implementation is already underway and is expected to be completed
during 2012-13.

2. Regional Rural Bank Service Regulations 2010

Based on the recommendations of Amaresh Kumar Committee, the GOI issued the RRB
Service Regulations 2010.

3. Regional Rural Bank Appointment and Promotion Rules 2010

GOI also notified the RRB Appointment and Promotion Rules 2010, in July 2010.

4. Technology Innovation through Core Banking Solutions (CBS)

The RRBs were required to ensure that their branches are put on CBS platform so that they
can provide hassle free and any where banking services to their clients. 80 RRBs have since
been fully migrated to CBS as on 30m September 2011. NABARD is providing financial
assistance to identified 28 weak RRBs to the extent of 40% for core banking solution from
Financial Inclusion Technology Funds (FITF) and rest of the cost will be shared by the
Sponsor Bank (50%) and the RRB (10%)

5. Financial Inclusion
As envisaged by the Government of India, RRBs as a group have become a strong
intermediary for financial inclusion in rural areas by opening a large number of “No frills”
accounts and by financing under General Credit Card (GCC), as per RBI guidelines. Total
number of accounts stood at 1310.17 lakhs in March 2011 which was 1188.67 lakhs in
March 2010.

6. Interest Subvention to RRBs

The continuance of the interest subvention scheme was announced in the Union budget
2010-11. Interest subvention of 1.5% per annum was available to RRBs for deploying their
own funds for crop loan up to 3 lakhs per farmer, provided the ultimate borrower get such

20
loans at 7% interest per annum. An additional subvention of 2% was announced during the
year to those farmers who repaid crop loans promptly within one year of disbursement.
Thus, the interest paid on crop loans by such farmers was effectively at the rate of 5%.

Problems (Weakness) of RRBs

Although RRBs had a rapid expansion of branch network and increase in volume of
business, these institutions went through a very difficult evolutionary process due to the
following problems.

1. Very limited area of operations.

2. High risk due to exposure only to the target group.

3. Public perception that RRBs are poor man's banks.

4. Mounting losses due to non-viable level of operations in branches located at resource-

poor areas. 5. Switch over to narrow investment banking as a turn-over strategy.

6. Heavy reliance on sponsor banks for investment avenues with low returns barring
exceptions, step-motherly treatment from sponsor banks.

7. Chairman of RRBs under the direction of Regional Managers appointed as Board of

Directors by sponsor banks.

8. Burden of government subsidy schemes and inadequate knowledge of customers leading

to low quality assets .

9. Unionized staff with low commitment to profit orientation and functional efficiency.

10. Inadequate skills in treasury management for profit orientation.

11. Inadequate exposure and skills to innovate products limiting the lending portfolios.

12. Inadequate effort to achieve desired levels of excellence in staff competence for
managing the affairs and business as an independent entity.

13. Serious undermining of the Board by compulsions to look up to sponsor banks, GOI,
NABARD and RBI for most decisions.

21
14. RRB hampered by an across the board ban on recruitment of staff.

SUGGESTIONS/RECOMMENDATIONS :-

1. Government should encourage and support banks to take appropriate steps in rural
development.

2. Efforts should be made to ensure that the non-interest cost of credit to small borrowers is
kept as low as possible.

3. Policy should be made by government for opening more branches in weaker and remote
areas of state.

4. Productivity can be improved by controlling the costs and increasing the income.

5. To participation cost, subsidy should be adjusted towards the end of the transaction for
which loan assistance is sanctioned.

6. Government should take firm action against the defaulters and shouldn’t make popular
announcements like waiving of loans.

7. The RRBs have to make an important change in their decision making with regard to
their investments.

8. The RRBs have to be very careful and reduce the operating expenses, because it has been
found from our study that these expenses have increased the total expenditure of the banks.

9. The RRBs have to give due preference to the micro-credit scheme and encourage in the
formation of self help group.

10. Cooperative societies may be allowed to sponsor or co-sponsor with commercial banks
in the establishment of the RRB.

11. A uniform pattern of interest rate structure should be devised for the rural financial
agencies.

12. The RRB must strengthen effective credit administration by way of credit appraisal,
monitoring the progress of loans and their efficient recovery.

22
13. The credit policy of the RRB should be based on the group approach of financing rural
activities.

14. The RRB may relax their procedure for lending and make them easier for village
borrowers.

8. CONCLUSIONS :-

To conclude, the rapid expansion of RRB has helped in reducing substantially the regional
disparities in respect of banking facilities in India. The efforts made by RRB in branch
expansion, deposit mobilization, rural development and credit deployment in weaker section
of rural areas are appreciable. RRB successfully achieve its objectives like to take banking to
door steps of rural households particularly in banking deprived rural area, to avail easy and
cheaper credit to weaker rural section who are dependent on private lenders, to encourage
rural savings for productive activities, to generate employment in rural areas and to bring
down the cost of purveying credit in rural areas. Thus RRB is providing the strongest
banking network. Government should take some effective remedial steps to make Rural
Banks viable.

 Regional Rural Banks plays a key role as an important vehicle of credit delivery in
rural areas with the objective of credit dispersal to small, marginal farmers & socio
economically weaker section of population for the development of agriculture, trade
and industry .But still its commercial viability has been questioned due to its limited
business flexibility, smaller size of loan & high risk in loan & advances. Rural banks
need to remove lack of transparency in their operation which leads to unequal
relationship between banker and customer. Banking staff should interact more with
their customers to overcome this problem. Banks should open their branches in areas
where customers are not able to avail banking facilities. In this competitive era,
RRBs have to concentrate on speedy, qualitative and secure banking services to
retain existing customers and attract potential customers.

23
9. BIBLIOGRAPHY :-

1. BOOKS –

1. Acharya Shyam Charan, Dr. Ashok Kumar Mohanty (2006) “Operational Analysis of
Regional Rural Banks.” Kalpaz Publications Delhi 110052.

2. Alan C. Elliott, Wayne A. Woodward (2007) “Statistical Analysis Quick Reference

Guidebook with SPSS Examples.” Sage Publication, New Delhi.

3. Bridget Somekh & Cothy Lewin (2002)Research Methods in Social Science. Vistor
Publication, New Delhi.

4. Batliwala Shrilatha(1994) .“The meaning of empowerment: New concepts from

action“. in Ardience German Gita Sen and Lincoin Chen (ed) Population Policies
Reconsidered, Health, empowerment and rights, Harvard UnivesiyPress,Boston.

5. Bhalla A.S..('19711 “The role of service in employment expansion in W. Galenson,

ed.. Essays on Employment ,Geneva: ILO 1971.

6. Bibek Debroy Amir Ullah Khan(2004) “Integrating the Rural Poor into
Marckets.Academic Foundation,In Association with India development foimdation and
International Development Enterprises.

7. Bibek Debroy; Amir Ullah Khan. (2004) “Integrating the Rural Poor in to Markets.”
Published by Academic Foundation And International Development Enterprises.(India).
Sage Publications. New Delhi.

8. Dr. D. G. Girdhari.(March, 1986.) “Rural Credit In India.” Publisher: Uday

Publications, Aurangabad.

9. Ela Bhatt (1995) : “Empowering the poor through micro- finance : The Sewa bank
socieil change volimtarv action Sage Publications, New Delhi.

24
10. Ghanekar. V.V. (January 2006) “Self Help Group.” Published by Institute of Rural
Development & Education. 1208, A/2, “Ratnakar” Bungalow, Apte Road Pune 411004.

2. JOURNALS –

1. B. Sen ,2000 “NABARD and Micro-Finance”. Sampark, Vol4,Issue2April -June 2000.

2. D.Baddhopadhyay and B.N. Yugandhar,Amitava Mukhariee(2002)”Convergence of

Programmes bv Empowering SHGs and PRIs”. Economical and Political
lPgeWy,VolumeXXXVII no.26,June 2002.

3. Dr. Punithavathy Pandian & R. Eswaranf2002\”Empowerment of Women Through

Micro-Credit”. To/awa. Volume 46 November 2002.

4. Hashim S.R.(2000) Employment and Unemployment in a society in transition The

Indian Journal o f Labour Economics yo h a a t 43,No. 1.2000.

5. Hirvey Indira,(2002) Employment and unemployment situation in 1990s.How good

are NSS data ?. Economical and political weekly , A Sameekha trust publication. May
25-31,2002.

6. M H Bala Subrahmanya (2004) Small Industry and Globalization. Economical And

Political Weekly Vol No XXXK No 18, May 2004.

7. Mahabub Hossain (2004) Rural Non-Farm Economy. Economical And Political

Weekly, Vol No XXXIX No 36, Sept 2004.

8. Pallavi Chavan , R.Ramkumar (2002)”Micro-Credit and Rural Poverty: the

eyidence”£co«o7wica/ and Political IPeeAJy,Volume XXXVII No.l0,March 2002.

9. Parag Dubey: (2006) “Socioculture Factors and Enabling Policies for Non- timer
Forest Products - based Micro enterprises Development” The journal o f
entrepreneurship, 16,2 (2007) 197-206.

10. R.Radhakrishna (2002), “Agricultural Growth. Employment and

Povertv”£cowo/»ocg/ and political ITeeA/y,Volume XXXVII No.3, January 2002.

25
3. REPORTS –

1. Abid Russian (1997) “Report of Expert Committee on small Entrepreneurs' The

Ministry of Industries Government of India, New Delhi.

2. Annual Reort 2003-04 Government of India .Planning Commission.Yoiana

Bhavan,New Delhi.

3. Aijun Sen Gupta Committee,(2008) Report on conditions of work and promotion of

livelihood in unorganized sector: National commission for enterprises in unorganized
sector.” Publisher - Academic foundation- September 2008.

4. Chvan Ravindra (1999) Atta Bhakari Kon Kamar ? YASHADA,Pune.

5. Milind S.Bokil,(2003) “Micro - Enterprises and gender division of

labour”.Development support team,pune.

6. Non-agricultural enterprises in in formal sector in India. NSS 55th round report ,1999-
2000.,NtionaI Sample Survey Organisation,Department of Statistics,Govemment of
India.

7. NABARD Annual Reports- 2004-05, 2005-06,2006-07.

8. N.Shrinivasan(2009) Micro Finance India : State of the sector report 2008.Sage

Publication ,New Delhi.

9. Promotion of linkages between banks and SHGs in Nepal: Report ,SHGs Task
force ,Nepal,Kathmandu(1988).

10. Status Report for UNOPS Supervision Mission (11 -22 September
2001)MRCP,Publication NABARD Pune.

4. RESEARCH STUDIES -

26
1.) C.Ramlingam (1989) Studies on Self Help Groups of the Rural
Poor,NABARD,APRACA.

2) Malcolm Harper(2002) Promotion of self help group under the SHG Bank Linkage
Programme in India-An Assesment.Micro Credit Innovation Department,NAB
ARDjMumbai

3) Kim Wlison-The role of Self help group bank linkage programme in preventing
Rural_____Emergencies_____in_____ India,Micro credit Innovations
Department,NABARD,Mumbai.

4) Dr.Erhard Kropp, Dr.B.S. Suran- Linking Banks and Self Help Groups in IndiaAn
Assesment. Micro Credit Innovation Department,NABARD,Mumbai.

5) Dr.Hans Dieter Seibel,Harish Kumar RDave- Commercial Aspect of Self Help Group
Bank Linkage Programme in India. Miro Credit Innovations
Department,NABARD,Mumbai.

6) Aloysius Femandez.MYRADA-Impact of SHG Bank Linkage Programme on Social

Indicators and Empowerment of the members.Micro Credit Innovations
Department,NABARD,Mumbai.

7) V. Puhazhendi,K.C.Badatya (20Q21Self Help Group - Bank Linkage Programme for

Rural Poor in India an Impact Assesment. Micro Credit Innovations
Department,NABARD,Mimibai.

8) Jaya S.Anand (2002^Self help groups in Empowering women : Case study of selected
SHGs and NHGs. Kerala Reaserch programme on loacal level Development Center for
development studies ,Tiruvananthapuram,

9) Kumar Aniket (2006) Self help group linkage programme : A Case studv.Economics
Department ,University of Edinburgh,Edinburg,www.aniket.co.uk

10) Misra S.B. (2002) Empowering Women for Entrepreneurship: The role of
Microfinance.Birla Institute of Technology and Science,Pillani.

27
5. PH.D.THESIS -

1) Dadlani Shobha (20023 Women Entrepreneurs in Conventional and Non Conventional

Business. University of Pune.

2) Gangurde Saroj (2006) A Comparative Study of vyomen entrepreneurs from Business

Communities like Parsi.Sindhi.Bohari.Marwari.Guirathi and non business Community
like Maharashtrian working in Pune and Pimpari Chinchwad Muncipal Corporation Area
(A Case Study),University of Pune.

6. WEBSITES -
1) www.graminfoundation.org

2) www.nabard.org

3) www.labourfile.org

4) yyww.planningcommission.nic.in

5) www.xmep.org

6) www.microenterprises.net

7) www.amazon.com/exec

8) www.microe. Com

9) www.ilo.org/public

10) www.sidbi.com

1. Colette Dum man (2001) ‘Low income women: The case of the community
entrepreneurs programmes.

2. Harper (1992) ‘Women of Poor Communities in Odisha.

28
 3. K.P. Kumaran : Role of Self - ‘Help Groups in Promoting Micro Enterprises through
Micro Credit An Empirical Study.

4. Kaur and Prashar (1993) in their work on ‘Entrepreneurship Amongst Rural Women’ .

5. P Dinakara Rao and Swapna Chimanchodkar(2002) Micro Finance Institutions

Delivery Models

6. P. Satish (2004) Rural Finance; Role of State and State-owned Institutions.

7. Patel Jyoti R.,(2000) Women entrepreneurship in informal sector.

8. S. K. Panda(2000) in his study Micro finance in economic empowerment of weaker

section.

9. Singla and Syal (1997) ‘ Problems Being Faced by Women Entrepreneurs’.

10. Srivastava and Chaudhary (1991) on ‘Women Entrepreneurs: Problems, Perspectives

and Role Expectations from Banks’ .

11. Tanuka Roy(2001) 'Liberalization and its Impact on Urban Informal Sector'.

12. Thelma Kay(2002) ‘Empowering Women Through Self-Help Micro.

13. V. Satyamurti(2005) ‘Micro enterprise as a means of youth employment.

10. REFERENCES :-

1.Bagachi, K. K. and A. Hadi (2006), Performance of Regional Rural Banks in West Bengal:
an evaluation, Serials Publications: New Delhi.

2. Bose, S. (2005) Regional Rural Banks: The Past and the Present Debate.

3. Das, U.R. (1998) “Performances and Prospects of RRBs”, Banking Finance November.

4. Gupta, S.K (1996) “Profitability and Regional Rural Banks”, Kurukshetra, July.

29
5. Gupta and Sodhi (1995), “Economic Liberalization and Rural Credit”, Kurukshetra, Vol.
XLIII, No. 10, p-27-30.

6. Horseman, S.B (2002), Performance of Regional Rural Banks, New Delhi.

7. Ibrahim Dr. M. Syed (2010) “Performance Evaluation of Regional Rural Banks in India”,
International Business Research Vol. 3, No. 4; p-203-211.

8. Jham Poonam (2012) “Banking Sector Reforms and Progress of Regional Rural Banks in
India (An Analytical Study)”, Online published 11 January.

9. Khankhoje, D. and Sathye, M. (2008) “Efficiency of Rural Banks: The Case of India”,
International Business Research, Vol. 1. No.2, pp. 140-149.

10. Kannan, R. (2004), Regional Rural Banks.

30
11. A SPECIAL CASE STUDY ON RUSHIKULYA GRAMYA
BANK IN GANJAM (District) , ODISHA :-

INTRODUCTION :-

Rushikulya Gramya Bank is the first of the three Regional Rural Banks sponsored by Andhra
Bank was established on 14"' February, 1981 under the provision of the section 3 of the
Regional Rural Bank Act, 1976 with its head office at Berhampur, Ganjam, Odisha. As a
scheduled commercial bank, it is authorized to conduct all types of banking activities under
the section-SB of the Banking Regulation Act 1949. The bank is affecting the socio-
economic life of the people of Ganjam district. The profile of the bank is presented in this
section.

AREAS OF OPERATION OF THE BANK :-

Rushikulya Gramya Bank is having its existence in the Ganjam and Gajapati districts where
the perennial rivers the Rushikulya and Vamsadhara are the source for the agricultural
production. Furthermore, the two districts, comprising of 29 blocks, which are resourceful
for the mineral products and also forest produce, especially in the tribal areas of the Gajapati
district. The bank has the privilege of major presence in both the districts. The bank has been
vigorously pursuing its social objectives and is committed to serve the economically
backward sections of the society, agriculturists, rural women and small business
entrepreneurs for all-round development of both the districts. The bank has played a pivotal
role in 100 percent financial inclusion of the Ganjam and Gajapati districts "^l Through its

31
wide branch network, it has penetrated into the nooks and comers of both the districts and
has been making substantial contributions for the economic development.

BANK NETWORKS OF THE BANK :-

Table-4.14 shows the details of the branches of Rushikulya Gramya Bank in the Ganjam and
Gajapati district. There were total 84 Rushikulya Gramya Bank branches operating in both
the districts. It was revealed that in the Ganjam district there were 74 Rushikulya Gramya
Bank branches which were 88.10 percent to the total branches of the bank and in the
Gajapati district there were only 10 Rushikulya Gramya Bank branches which were 11.90
percent to the total branches of the bank. Out of 74 Rushikulya Gramya Bank branches, 49
branches were in the rural areas, 15 branches were in the semi-urban areas and 10 were in the
urban areas. Again there were 10 Rushikulya Gramya Bank branches in the Gajapati district
out of which, 9 branches were in the rural areas which were 90 percent to the total branches
and 1 branch was in the semi-urban areas which was 10 percent to the total branches. Out of
84 Rushikulya Gramya Bank branches 58 branches were in the rural areas which was 69.05
percent to the total branches of the bank, 16 branches were in the semi-urban areas which
was 19.05 percent to the total branches of the bank, and 10 branches were in the urban areas
which was 11.90 percent to the total branches of the bank. Since 69.05 percent of the
branches were in the rural areas, it can be said that the bank is concentrating more in the
rural areas of both the districts.

32
CUSTOMER BASE OF THE BANK :-

There has been an increase in the number of accounts as fiimished showing in the growth in
the new customer base. The branches have opened 47323 deposit accounts during the
financial year 2011-12. There was an increase of 14114 advance accounts from 2010-11 to
2011-2012. The bank has been extending the best customer service through its network of
branches duly taking care of their total banking needs. The bank has conducted several
customers meet for creating awareness about the various deposit and advance schemes
offered by the bank. This has given an opportunity to the bank for understanding their needs
in the better way. The chairman and general manager are regularly attending the 'Customer
Meets', 'Farmers Club' etc. at various branches. From the table-4.15 it is clear that the
number of deposit and advance accounts have increased constantly from 2008-2009. The
growth rate of both the accounts was satisfactory. In the financial year 2011-12 the growth
rate of the deposit account and advance account were 8.74 percent and 9.61 percent
respectively.

33
THE ORGANIZATIONAL SETUP OF THE RUSHIKULYA GRAMYA BANK :-

The board is the highest policy-decision making body vested with all the powers of the bank.
The chairman is the chief executive of the bank. He is assisted by the general manager in the
operation and administration of the bank. The area managers are the controllers of the
branches entrusted to them and are responsible for the growth and controlling of business
aspects of their respective areas. They work directly under the chairman/general manager.
The branch is the ultimate outlet point for credit delivery/deposits. The branch manager is
responsible for the growth of the business and controlling aspects of the branch. A
representative organizational structure of the Rushikulya Gramya Bank is shown in the
fig;ure-4.5. However, there are variations depending on the staff strength, volume of the
business, area of coverage, number of branches and other local priorities.

34
HUMAN RESOURCES OF THE BANK :-

The total staff strength of the bank was 382 including three deputed staff members from the
sponsor bank as on 31^' March 2012, whereas the total staff strength was 332 as on 31^'
March 2003. The total staff members of the bank have increased in the study period. The
details of the manpower as on 31*' March 2012 are depicted in the table-4.16.

35
FINANCIAL INCLUSION OF THE BANK :-

In consonance with the policy of the government of India for providing banking services in
every village having population over 2000, the bank was allotted with 92 villages in the
Ganjam district and 3 villages in the Gajapati district. Accordingly, the total households of
more than 215000 in the service areas were covered and opened 165451 'No Frills Accounts'
to enable them to have the access to the banking services including the credit facihty under
the general purpose credit cards. The bank has been allotted with 95 villages having
population of 2000 and above for the implementation of the financial inclusion plan (FIP) by
providing the banking service at the village level. The bank is using the Information and
Communications Technology (ICT) mode supported by the Business Correspondents (BCs)
to provide such facilities. The enrollment of accounts at these villages is under process and
35022 accounts have been mobilized. Smartcards have been issued in the pilot village
Nimigam in the Hinjilicut block and live transactions of both the on-line and off-line have
been conducted successfully. The bank has played a pivotal role in ensuring cent percent
financial inclusion in the Ganjam and Gajapati district under the leadership of Andhra Bank
as lead bank '^^l The detail of the financial inclusion of the bank in the study area is given
the table-4.17.

THE TECHNOLOGY PRODUCTS OF THE BANK :-

36
The bank has successfully brought all its branches into the core banking enviroimient. Many
value added services are provided to the customers like Short Message Service (SMS) alerts,
National Electronic Fund Transfer (NEFT) remittance, and Automated Teller Machine
(ATM) cards. It is a matter of pride that the bank is the first Regional Rural Bank in Odisha
state to migrate all the branches to the Core Banking Solution (CBS) platform. It has also
earned the distinction as the first Regional Rural Bank in Odisha state to introduce the Short
Message Service (SMS) push alerts facility and the first Regional Rural Bank in the eastern
region to provide Automated Teller Machine (ATM) Rupay Card facility to the customers.
All the branches and head office are provided with the E-Mail facility to improve the flow of
communication. E-govemance initiatives are implemented in the bank from 1^' January 2012
with an objective to improve the quality and efficiency of the service delivery and to
gradually move towards the less paper based transactions.

WOMEN DEVELOPMENT CELL AND SELF-HELP GROUPS(SHGs) :-

The bank continues to maintain the women development cell at the head office formed at the
behest of the National Bank for Agriculture and Rural Development (NABARD) during
1997 to increase the capacity building and credit flow to the women. Keeping in view the
national priorities and to improve micro credit, the bank has participated actively in the Self
Help Groups. Rushikulya Gramya Bank is playing a key role in providing the self-
employment opportunity to the poor women. Micro finance to be the thrust area of the cell
and to achieve the objective the cell has concentrated more on the Self Help Groups. The
bank has assisted 266805 women through the Self Help Groups with the total financial
outlay of Rs. 13586.45 lakh on a cumulative basis.

37
PRODUCT PROFILE OF THE RUSHIKULYA GRAMYA BANK :-

All the conunercial banks have got the primary functions of accepting the deposits and advances
of the loans. Similarly, Rushikulya Gramya Bank as a scheduled commercial bank has got the
same primary functions. Below are the different products of the bank.

THE DEPOSIT PRODUCTS OF RUSHIKULYA GRAMYA BANK :-

a. Saving Deposits :

i. Savings Bank Account :-

The savings bank account encourages the saving habits among the public. The rate of interest
of this account is low. At present it is about 4 percent per armum. Total amount of withdraws
from a savings account during any quarter whether by cheques or otherwise will not exceed
Rs. 50000. The minimum balance at urban area is Rs. 500, semi-urban is Rs. 300 and a rural
area is Rs. 100. In an account at any time below the minimum limit the account holder may
be charged Rs. 5. This account can be opened in a single name or in the joint names.

ii. Surakshya Savings Bank Deposit:-

The Surakshya Savings Bank Deposit is an insurance linked scheme with the accidental
benefit of Rs 1 lakh. The account holders in the age group of 5 to 70 years are provided with
and accident insurance cover under the group personal accident insurance policy of Oriental
Insurance Co. Ltd. The insurance cover is available to all the joint account holders if all the
account holders covered under this policy by paying the premium. Minimum balance at
38
urban area is Rs. 500, semi-urban is Rs. 300 and rural area is Rs. 100. In an account at any
time below the minimum limit the account holder may be charged Rs. 5. This account can be
opened in a single name or in the joint names.

iii. Rushikulya Jeevan Surakshya :-

The Rushikulya Jeevan Surakshya is a savings bank account that covers insurance for the
natural and accidental death. The scheme is open to all those who are in the age group of 18
to 54 years. The sum assured is Rs. 1 lakh in case of the natural death and is Rs. 2 lakh in
case of the accidental death. The beneficiary has to intimate in writing to the bank within 30
days from the date of death of the depositor and if the death occurs within 45 days of the
account opening no benefit will be paid to the beneficiary.

b. Current Deposit :

This account is operated by the businessmen. Withdrawals are freely allowed. No interest is
paid. The account holders can get the benefit of the overdraft facility.

c. Term Deposit :

i. Fixed Deposit :-

Money is deposited at one time for a specific period of time. The higher rate of interest is
paid as compared to other deposits, which varies with the time period of the deposit.
Withdrawals are not allowed before the expiry of the time period.

39
ii. Kalpabata Deposit:-

It is a reinvestment plan deposit and interest will be accrued to the principal amount. No
provision of paying the interest monthly, quarterly, half yearly, yearly like fixed deposit.

iii. Recurring Deposit:-

The recurring deposit is accepted in monthly installments with a minimum period of one year
and maximum 120 months. However, the deposits for the period exceeding 10 years will be
accepted with special permission.

THE LOAN PRODUCTS OF RUSHIKULYA GRAMYA BANK :-

Like acceptance of deposits, advances of loans are very important and fundamental functions
of a bank. The advances of Rushikulya Gramya Bank for different purposes are as follows.

a. Agriculture:

i. Rushikulya Bank Kisan Card:

The individual farmers who are cultivating own land is eligible for this loan and the limit is
valid for 3 years. This card has provision to allow the farmer to avail credit facility for petty
expenses of the card holders for production purpose such as urgent repair of pump set, cart,
plough etc.

40
ii. Farm Mechanization:

Farm mechanization is the scheme in which tractors and power tillers are loaned to improve the
farm mechanization. Tractors are loaned to the farmers having 4 acres of permanently irrigated
owned land and 8 acres of dry owned land. Power tillers can be loaned to those who are hiving 2
acres of cultivatable land. Repayment can be done in 9 yearly or 18 half yearly installments linked to
the harvesting seasons. The collateral security is in the form of mortgage of land as applicable under
the state law.

iii. Rural Godowns:

Rushikulya Gramya Bank advances for construction of the rural godowns. Farmers for
storing agricultural produce; entrepreneurs and groups of persons engaged in storing and
marketing of the agricultural commodities will be financed imder the scheme for the
establishment of the rural godowns. The amount depends on the capacity of the godowns.

iv. Rushikulya Bank Kisan Yana:

Rushikulya Bank Kisan Yana is the finance to the farmers, who are in the age limit of 55
and having the valid driving licence to purchase two wheelers. The total limit of the Kisan
Yana should not exceed Rs. 50000 and collateral security is not to be insisted; if the limit
exceeds Rs. 50000 collateral security of 150 percent of the loan amount is insisted. The loan
should be repayable in 10 half yearly installments and 25 percent of margin should be
maintained. The vehicles to be hypothecated to the bank.

V. Minor Irrigation:

Rushikulya Gramya Bank grants loan for the minor irrigation to increase the agricultural
productivity.

41
vi. Horticulture:

Rushikulya Gramya Bank provides finance for horticulture. Again it aims for the
productivity of agriculture.

vii. RDS Scheme:

The scheme aims at rescuing the farmers who have been under the clutches of the local
money lenders, non-institutional lenders at usurious rates of interest that finally leaving the
farming community in distress resulting in debt of the farmers. The scheme provides relief to
such farmers to avail the hustle free credit from the banking channel to pay off the debt to the
non-institutional money lender and to ensure that the villages in the service areas are
designated as money lender fi-ee villages.

b. Micro, Small and Medium Enterprises:

i. Rushikulya Laghu Udyog Credit Card:

This scheme is applicable to the small business units, retail traders, village industries, tiny
and small scale industrial units, professional and self-employed persons. Maximum of Rs. 2
lakh is given to the existing borrowers. This account is operated just like a cash credit. The
borrower has to liable security.

ii. Rushikulya Swarjgar Credit Card:

42
To meet the credit requirements of the small artisans, handlooms weavers, handicrafts,
fisherman, rickshaw owners and pullers. Self Help Groups and other activities falling under
the tiny, village and cottage industries and of selfemployed persons, this scheme is
introduced. The quantum of loan is up to Rs. 25000 per borrower. The nature of loan may be
term loan, working capital and composite. No collateral security is to be insisted.

c. Retail Credit:

i.Rushikulya Vidya Yoti:

Rushikulya Gramya Bank provides education loan up to Rs. 10 lakh in India and Rs.20 lakh
for studies in the abroad. The purpose of the loan is to meet the cost of tuition fee, hostel fee,
examination fee, books, project work, study tours, air passages and maintenance for the
abroad studies. Total loan can be issued up to Rs. 4 lakh guarantee of parents and above Rs.
4 lakh collateral security of suitable value and guarantee of the parents is required. The rate
of interest may change from time to time.

iii. Mortgage Loan:

Under this, loan is provided to the individual against immovable urban properties located at
the selected places. An individual holding house in his/her name is eligible for this scheme.
The age of the customer should be between 21 to 60 years. The quantum of finance of the
scheme is minimum Rs.50000 and maximum is up to Rs.5 lakh subject to 40 percent take
pay in the gross income is insisted. Margin of the scheme will be 50 percent of the value of
the property. The maximum repayment of this scheme will be 84 months (EMI). Mortgage of
the house will be taken as security. Processing and service charges are as applicable as per
bank's rule.

iii.Housing Loan:
43
 The housing loan is given to the person who is in the age group between 18-65 years for
maximum twenty years. The loan is given up to 75 percent of the cost of the construction.
For salaried persons it is the maximum 48 times of the monthly gross income. Loan for the
business and self-employed persons is the four times of the gross annual income as per
certificate issued by the competent authority. Other things like auditors certificate, income
tax returns etc. are required. Interest rate is as applicable as per the rules.

iv.Personal Loan:

This loan is given for the specific credit requirements of the borrowers for the personal
unforeseen commitments. The repayment can be done in 60 months. The quantum of loan is
up to 75 percent of the purchase value of the securities pledged including the accrued
interest. For the credit limits above Rs. 50,000 coobligation is necessary. Interest rate is as
applicable as per the rules.

V.Micro Credit:

The loan of very small amount not exceeding Rs. 50000 per borrower is being provided by
the bank either directly or indirectly through the self-help groups (SHGs). The bank has been
extending financing to B-MASS agencies at the block level through 17 designated nodal
branches in the Ganjam district for lending to the self-help groups. The bank is also
participating in the government sponsored poverty alleviation programmes through the
Swamajayanti Gram Swaraojgar Yojana (SGSY) scheme extending loans to the below
poverty line (BPL) families.

Key Performance Indicators Of The Rushikulya Gramya Bank (2003-2012) :-

44
The key performance indicators of the Rushikulya Gramya Bank are given in the table-4.18.
The following trends can be noted from the data.

i. Number of branches:

There were 84 Rushikulya Gramya Bank branches operating in the Ganjam and Gajapati
districts of Odisha as on 31st March 2012, whereas there were 72 Rushikulya Gramya Bank
branches as on 31^' March 2003. From the table it is revealed that the number of branches of
the Rushikulya Gramya Bank has increased in the study period.

ii. Aggregate business:

The aggregate total business of the bank was Rs. 436.4 crore in the year ended March 2003,
which increased to 1525.7 crore in the year ended March 2013. This shows that there is an
increase in the aggregate business of the bank in the study period.

iii. Deposits:

The deposits of Rushikulya Gramya Bank have increased substantially over the years. The
total deposit of the bank was Rs. 305.2 crore as on 31^' March 2003. It has increased to Rs.
1037 crore as on 31^' March 2012.

iv. Advances:

The total advances granted by all the banks amounted to Rs. 488.74 crore as on 31^' March
2012. Over 90 percent of the advances of the bank were direct advances to the small and
marginal farmers, landless labourers and rural artisans.

45
V. Credit Deposit Ratio (C-D Ratio):

The Credit Deposit Ratio of Rushikulya Gramya Bank was 47.13 percent as on 31" March
2012, whereas it was 43 percent as on 31" March 2003.

vi.Profit:

The operating profit was Rs. 19.71 crore in the year 2012, whereas it was Rs. 10.98 crore in
the year 2003. The net profit was 8.64 crore in the year 2013; it was Rs. 4.01 crore in
2003. This indicates that net profit has increased in the study period.

vii. Priority Sector Lending (PSL):

The priority sector lending of the Rushikulya Gramya Bank was Rs. 340.83 crore as on 31^'
March 2012, whereas it was Rs. 83 crore as on 31st March 2003. Out of the total priority
sector lending, the agricultural advances was Rs. 191.07 crore as on 31^' March 2012,
whereas it was Rs. 34.85 crore as on 31^' March 2003. This revealed that the bank has
provided more credit to the priority sector then non priority sector in the study period.

viii. Number of clients:

46
 The number of clients of the bank was 7.01 lakh as on 31^' March 2012, whereas it was 5.0
lakh as on 31stMarch 2008. It showed the number of clients has increased in the study
period.

ix. Non-Performing Assets( NPAs):

The non-performing assets were 5.36 percent in the year 2003; it was 0.96 percent in the year
2012. It shows that the non-performing assets have been decreased in the study period.

 From the above analysis it is revealed that the Rushikulya Gramya Bank has been
achieved notable progress in expanding the branch network and extending credit
support to the weaker sections in the rural areas. They exist as rural bank of the rural
people.

47
48
The List Of Rushikulya Gramya Bank Rural Branches With Their Respective
Total Beneficiaries As On 3l" March 2012:

Table-4.19 shows the list of rural branches of Rushikulya Gramya Bank with their
respective total beneficiaries as on 31^' March 2012. It is very clear that Hatiotta has the
highest 2666 number of beneficiaries, whereas the newly opened branch Randha has the
lowest 215 number of beneficiaries as on 31st March 2012.

49
50
51
Conclusions:

The study of the profiles related to the research is added advantage, which is revealed
from the above profiles. The study of the profile of the Ganjam district could able to
understand the socio-economic profile of the people in the study area, which has helped
in defining some of the variables. Similarly study of the profile of Regional Rural Bank
and Rushikulya Gramya Bank could help to understand the major objectives and trends
of some of the variables used in the research.

REFERENCES :-

1. Profile of Ganjam District Retrieved from http://ganjam.nic.in/

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