Regional Rural Banks Act, 1976

Section 23D addresses liquidation of RRBs.

Section 24 empowers the Central Government to give directions.

Section 24A concerns inspection, audit and scrutiny by the Sponsor Bank.

Section 25 deals with obligations as to fidelity and secrecy.

Section 26 provides a bar to liquidation of an RRB.

Section 27 deals with defects in appointment or constitution not invalidating acts or proceedings.

Section 28 deals with indemnity of directors and other specified persons.

Section 29 concerns the power to make rules.

Section 30 deals with the power to make regulations.

Section 31 deals with removal of difficulties.

Section 32 states that the Act overrides provisions of other laws.

The Act’s capital provisions identify the Central Government, the concerned State Government and the Sponsor Bank as shareholders.

The commonly applicable structure is 50% Central Government, 15% State Government and 35% Sponsor Bank; check current amendments or notifications for exam-specific updates.

The preamble refers to agriculture, trade, commerce, industry and other productive activities in rural areas.

The Sponsor Bank is required to train personnel of the RRB it sponsors, alongside other specified support.

For an RRB established in a Union territory, the term State Government means the Central Government.

Section 2 provides that such terms have the meanings assigned to them in the Reserve Bank of India Act, 1934.

Section 2 directs that such terms have the meanings assigned to them in the Banking Regulation Act, 1949.

Section 3 specifies that an RRB is a body corporate with perpetual succession and a common seal.

Section 3 identifies subscribing to the RRB’s share capital as a Sponsor Bank duty.

The Central Government may specify the operating local limits in the establishment notification or a subsequent notification.

Section 20 requires an annual report to be furnished to shareholders, supporting formal accountability and reporting.

Section 24 gives the Central Government power to give directions.

Chapter V is titled Accounts and Audit.

Chapter III is titled Management.

RRBs are intended to provide credit and banking facilities supporting productive rural activities, including agriculture and small enterprises.

India Code and official government publications provide primary statutory text and should be checked for current amendments.

The Regional Rural Banks Act, 1976 is Act No. 21 of 1976.

The Act is dated 9 February 1976.

Section 1 states that the Act is deemed to have come into force on 26 September 1975.

Section 1 provides that the Act extends to the whole of India.

The Act provides for incorporation, regulation and winding up of RRBs to support rural economic development and provide credit facilities.

The preamble particularly refers to small and marginal farmers, agricultural labourers, artisans and small entrepreneurs.

Section 2 sets out definitions used in the Act.

The Board means the Board of directors of that Regional Rural Bank.

The Sponsor Bank is the bank by which the Regional Rural Bank has been sponsored.

It means the local limits specified under Section 3 within which an RRB operates.

The Central Government may establish an RRB by notification in the Official Gazette after a Sponsor Bank’s request.

Section 3 provides for establishment by Central Government notification in the Official Gazette.

An RRB is a body corporate with perpetual succession and a common seal.

Subject to the Act, an RRB can acquire, hold and dispose of property, contract, and sue or be sued in its own name.

The Sponsor Bank must assist the sponsored RRB, including by subscribing to share capital, training personnel and providing agreed managerial and financial assistance.

Section 4 deals with offices and agencies.

Section 5 deals with authorised capital.

Section 6 deals with issued capital.

Section 7 deals with shares being approved securities.

Section 8 concerns management of an RRB.

Section 9 addresses the Board of directors.

Section 10 concerns the term of office of directors.

Section 11 deals with the Chairman.

Section 12 deals with disqualifications.

Section 13 concerns vacation of a director’s seat.

Section 14 deals with Board meetings.

Section 15 deals with committees of the Board.

Section 16 deals with fees and allowances of directors and members of committees.

Section 17 concerns RRB staff.

Section 18 sets out the business an RRB may transact.

Section 19 deals with closure of accounts.

Section 20 deals with the annual report to be furnished to shareholders.

Section 21 deals with disposal of profits.

Section 22 contains this deeming provision for Income-tax Act purposes.

Section 23 addresses interest-tax not payable.

Section 23A deals with amalgamation of RRBs.

Section 23B deals with the sufficiency of notice.

Section 23C deals with cessation of business of transferor RRBs.