Act Number: 21

Act Name: The Regional Rural Banks Act, 1976

Year: 1976

Enactment Date: 1976-02-09

Long Title: An Act to provide for the incorporation, regulation and winding up of Regional Rural Banks with a view to developing the rural economy by providing, for the purpose of development of agriculture, trade, commerce, industry and other productive activities in the rural areas, credit and other facilities, particularly to the small and marginal farmers, agricultural labourers, artisans and small entrepreneurs, and for matters connected therewith and incidental thereto.

Ministry: Ministry of Finance

Department: Department of Financial Services

Section 6: Issued capital.
    1 [(1) The issued capital of each Regional Rural Bank shall, in the first instance, be such as may be fixed by the Central Government in this behalf, but it shall in no case be less than 2 [one 2 [one crore of rupees].]
     (2) Of the capital issued by a Regional Rural Bank under sub-section (1), fifty per cent. shall be subscribed by the Central Government; fifteen per cent. by the concerned State Government and thirty-five per cent. by the Sponsor Bank.
     3[Provided that in case the Regional Rural Bank raises its capital from sources other than the Central Government or the State Government or the Sponsor Bank, the shareholding of the Central Government and the Sponsor Bank shall not be less than fifty-one per cent.:
     Provided further that the Central Government shall consult the concerned State Government if the level of shareholding in the Regional Rural Bank of such State Government is reduced below fifteen per cent.]
     4 [(2A) The Central Government may, in consultation with the Sponsor Bank and the State Government, by notification, either raise or reduce the limit of shareholding of the Central Government, the State Government or the Sponsor Bank specified in sub-section (2):
     Provided that the Central Government shall consult the concerned State Government before reducing the limit of shareholding of such State Government.]
     (3) The Board may, after consultation with the 5 [National Bank], the concerned State Government and the Sponsor Bank and with the prior approval of the Central Government, from time to time, increase the issued capital of the Regional Rural Bank; and, where additional capital is issued, such capital shall also be subscribed in the same proportion as is specified in sub-section (2) 4 [or, as the case may be, notified by the Central Government under sub-section (2A)].
Notes:
1. Subs. by Act 1 of 1988, s. 6, for sub-section (1) (w.e.f. 28-9-1988).
2. Subs. by Act 14 of 2015, s. 4, for "“twenty-five lakhs of rupees or exceed one crore of rupees" (w.e.f. 4-2-2016).
. Ins. by s. 4, ibid. (w.e.f. 4-2-2016).
4. Ins. by Act 14 of 2015, s. 4 (w.e.f. 4-2-2016).
5. Subs. by Act 1 of 1988, s. 6, for "Reserve Bank" (w.e.f. 28-9-1988).
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