RAS question
The Regional Rural Banks (RRBs) are jointly owned by:
Correct answer: (A) Central Government (50%), State Government (15%), and Sponsor Bank (35%).
Regional Rural Banks are jointly owned by the Government of India, the concerned State Government and the sponsor bank in the share-capital ratio of 50%, 15% and 35%, respectively.
Explanation
Regional Rural Banks have a tripartite ownership structure. NABARD states that RRBs were first set up in 1975 under an Ordinance and then under the Regional Rural Banks Act, 1976, to develop the rural economy, supplement the cooperative credit structure and enlarge institutional credit for the rural and agricultural sector. Their share capital is contributed by three entities: the Government of India contributes 50%, the concerned State Government contributes 15%, and the bank that sponsored the RRB contributes 35%. That is why option A is the precise answer: it gives both the correct owners and the correct proportions, instead of treating RRBs as RBI-owned, NABARD-owned or solely Union Government institutions.
Why the other options are wrong
- (B) RBI is not listed in the ownership split; the official structure names the Government of India, the concerned State Government and the sponsor bank.
- (C) NABARD is the source explaining RRBs here, but it is not one of the three share-capital contributors in the 50:15:35 ownership structure.
- (D) The Central Government contributes 50%, but RRB ownership is not exclusive to it because the State Government and sponsor bank also hold defined shares.
Concept
This tests the institutional structure of rural credit in the Indian economy syllabus. RRB ownership recurs in RAS because it links banking institutions, rural credit delivery and statutory bodies under the Regional Rural Banks Act, 1976.