Development Banks – 02
State Cooperative Banks and Central Cooperative Banks at the district level provide both short term and term loans. Land Development Banks provide long-term loans. Some co-operative bank is scheduled banks, while others are non-scheduled banks. For instance, SCBs and some UCBs are scheduled banks (included in the Second Schedule of the RBI Act). Co-operative Banks are subject to CRR and SLR requirements as other banks. However, their requirements are less than commercial banks.
Although the main aim of the co-operative bank is to provide cheaper credit to their members and not to maximize profits, they may access the money market to improve their income so as to remain viable.
Co-operative Credit Institution
Rural Cooperative Urban co-operative Credit Institutions Credit Institutions
Short term Structure Long term Structure Structure District Primary Structure Primary
Co-operative Co-operative Agricultural Co-operative Co-operative
Banks Banks Credit Societies and Rural AgriculturalDevelopment and Rural
Regional Rural Banks
Regional Rural Banks (RRBs) are Indian Scheduled Commercial Banks (Government Banks) operating at regional level in different States of India. They have been created with a view of serving primarily the rural areas of India with basic banking and financial services.
Regional Rural Banks were established under the provisions of the RRB Act 1976. The Regional Rural Banks were owned by the Central Government, the State Government and the Sponsor Bank (Any commercial bank can sponsor the regional rural banks) who held shares in the ratios as follows Central Government – 50%, State Government – 15% and Sponsor Banks – 35%.
NABARD (National Rural Development Bank)
NABARD is a development bank focussing primarily on the rural sector of the country. It is the apex banking institution to provide finance for Agriculture and rural development. Its headquarter is located in Mumbai. It is responsible for the development of the small industries, cottage industries, and any other such village or rural projects.
It is a statutory body established in 1982 under Parliamentary act-National Bank for Agriculture and Rural Development Act, 1981.
NABARD’s initiatives are aimed at building an empowered and financially inclusive rural India through specific goal oriented departments
- It provides refinance supportfor building rural infrastructure.
- It prepares district level credit plansto guiding and motivating the banking industry in achieving these targets.
It supervises Cooperative Banks and Regional Rural Banks (RRBs) and helping them develop sound banking practices
Export – Import Bank of India
It was established on 1st January 19821 for financing, facilitating and promoting foreign trade in India. Besides it also coordinates various financial institutions for export and imports. The government wholly owns EXIM bank.
National Housing bank
NHB was established in 1988 as a wholly owned subsidiary of RBI. It is the apex banking institution providing finances for houses. The statutory mandate of NHB covers promotional, developmental and regulatory aspects of housing finance and focus on developing a sound housing finance system. In 2019 the regulatory function of RBI has been transferred to RBI.