Tag: sources of business finance - 2

The banking ombudsman scheme was introduced by RBI under section 35 A of the Banking Regulation Act, 1949 with effect from 1995. Under this scheme, a banking ombudsman who is a senior official is appointed. He/she handles and redresses the customer complaints against deficiency in certain banking services. 

Nationalized bank are the public sector banks. All the regional rural banks are owned by either central government or state government.

The idea of establishing Regional Rural Banks was mooted in the Twenty Point Programme of July 1975. It was established to serve the credit needs of the rural people.  

Regional Rural Bank (RRB) was established under the provision of an Ordinance and the RRB Act, 1976. RRBs are the created with the view to cater to rural areas of India with basic banking and financial services. They have banking operations in different states of India. 

Due to the financial crisis and failure of large banks, to keep a close watch  and supervision was required to avoid recurrence of many financial crisis. Hence, the Board for Financial Supervision was set up by RBI. The object was to pay at most attention to the supervision of the institution in the financial sector.

Nationalized Bank are the public sector banks, mostly owned by the state. All the Regional Rural Banks are owned by either central government or state government.  Hence, nationalized banks sponsor Regional Banks for greater rural development and availability of basic banking activities in rural areas. 

Dantwala committee led by Mohanlal Lallubhai Dantwala recommended in 1978 that RRB's should become an integral part of rural credit structure. It also recommended block level planning.  

Banking Ombudsman scheme was introduced under section 35 A of the Banking Regulation Act, 1949 with effect from 1995. Under Banking Ombudsman scheme, banking ombudsman is appointed by RBi he is a senior official. The official handles and redress customer complaints against deficiency in certain banking services. 

Long term agricultural credits are provided for land improvement, digging of wells, buying farm animals, purchase of machinery. Most of the expenses are relating to agriculture and other allied land development activities. Such long term agricultural credit is provided by Land Development Bank.

The government of India enacted The Deposit Insurance Corporation Act in 1961. The whole objective of DIC was to provide necessary protection to the depositors from the risk of losing their deposits  and to inspire public confidence in the banking system.