Chalapathi Rao Committee was constituted for restructuring of

Chalapathi Rao Committee was constituted for the restructuring of Regional Rural Banks in India.

1. Regional Rural Banks have been in existence for around three decades in the Indian financial scene.
2. The inception of regional rural banks (RRBs) can be seen as a unique experiment as well as an experience in improving the efficacy of rural credit delivery mechanisms in India.
3. With joint shareholding by Central Government, the concerned State Government, and the sponsoring bank, an effort was made to integrate commercial banking within the broad policy thrust towards social banking keeping in view the local peculiarities.
4. The genesis of the RRBs can be traced to the need for a stronger institutional arrangement for providing rural credit.
5. The financial viability of RRBs has engaged the attention of the policymakers from time to time.

1. The committee under the Chairmanship of Chalapathy Rao in 2003 (Chalapathy Rao Committee) recommended that the entire system of RRBs may be consolidated while retaining the advantages of the regional character of these institutions.
2. As part of the process, some sponsor banks may be eased out.
3. The sponsoring institutions may include other approved financial institutions as well, in addition to commercial banks.