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1.0). Introduction

The Regional Rural Banks (RRBs) have special place in the multi agency approach

adopted to provide agricultural and rural credit in India. These banks are state sponsored,

regionally based and rural oriented. As enshrined in the preamble to the RRBs Act 1976, the

RRBs were established 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 small and marginal formers,

agricultural laborers, artisans and small entrepreneurs and for matters connected therewith and

incidental thereto.

The RRBs were treated as scheduled banks right from their inception and functioned

alongside the larger commercial banks and the Cooperative banks. Over a period of time, they

have developed an impressive branch net work in the rural sector. During three decades of their

existence, the RRBs have passed through several phases. However, with their focus of operations

mainly in the rural areas, the RRBs have always been in an ideal position to provide financial

services to the rural population.

It was in the year 2004 that the Government of India, based on recommendations of the

committee on flow of credit to agriculture and related activities from the Banking system(headed by prof. V S Vyas) decided to consolidate the RRBs into State level entities within the

same Sponsor bank. The amalgamation process which began in September 2005, gained

momentum in the subsequent period, bringing down the total number of RRBs to 88 as at the end

of May 2008, out of which 42 were stand alone RRBs,45 were amalgamated RRBs and 1 RRB

was newly set up in the union territory of Pondicherry.

1.1). Poverty

Poor people live without fundamental freedoms of action and choice that the better-off

take for granted. They often lack adequate food and shelter, education and health, deprivations

that keep them from leading the kind of life that everyone values. They also face extreme

vulnerability to ill-health, economic dislocation and natural disasters. They are often exposed to

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ill treatment by institutions of the state and society and are powerless to influence key decisions

affecting their lives. These are all dimensions of poverty.

In almost all underdeveloped countries where per capita income is very low, income

inequality has resulted in a number of evils, of which poverty is certainly the most serious one.

In India, even now in spite of all the development during the past five decades, nearly forty per

cent of the population is poor and for most of the time suffers from extreme destitution. No one

says that equitable distribution of present income in India will make everyone rich, but there

must not be any doubt about the fact that it will ensure the required minimum consumption to all.

In a world where political power is unequally distributed and often sneers the distribution

of economic power, the way state institutions operate may be particularly unfavourable to poor

people. For example, poor people frequently do not receive the benefits of public investments in

education and health. And they are often the victims of corruption and arbitrariness on the part of

the state. Poverty outcomes are also greatly affected by social norms, values, and customary

practices that, within the family the community, or the market, lead to exclusion of women,

ethnic and racial groups, or the socially disadvantaged. That is why facilitating the empowerment

of poor people by making state and social institutions more responsive to them-is also key to

reducing poverty.

Vulnerability to external and largely uncontrollable events-illness, violence, economic

shocks, bad weather, natural disasters-reinforces poor peoples sense of ill-being, increases their

material poverty, and weakens their bargaining position. That is why enhancing security by

reducing the risk of such events as wars, disease, economic crises, and natural disasters-is key to

reducing poverty.

The world has deep poverty amid plenty. Of the worlds 6 billion people, 2.8 billion-

almost half- live on less than $-2 a day, and 1.2 billion-a fifth- live on less than $-1 a day, with

44 per cent are living in South Asia. In rich countries less than 1 child in 100 does not reach its

fifth birthday, while in the poorest countries as many as a fifth of children do not.

One of every three persons in India is officially poor, and two of three are undernourished

or malnourished. If we count those who are deprived of safe drinking water, adequate clothing,

or shelter, the number is considerably higher. Finally, if we also include people who are above

the officially defined poverty line, but one vulnerable, in the sense of not being adequately

insured against rising prices, unemployment, illiteracy, declining incomes, old age, and disease,

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we get a huge majority. A recent Human Development Report ranked Indias development index

at 138 out of 175 countries. A World Bank report predicts that most of the worlds poor will

reside in South Asia by 2020. A comprehensive analysis of the determinants and causes of

poverty, its evolution, its short-term alleviation and long term eradication strategies, and

discussion of the related issue of what constitutes development and well-being, and how it

should be measured. It is important to examine the impact of these improving terms of trade

(through higher agricultural prices) on the poor.

1.2). Definition of Poverty

Poverty is a complex phenomenon, which cannot be subsumed under a single definition,

applicable to all societies and all contexts. It has to be defined in relation to be average living

standards in a society and the social reforms and customs acceptable to it at that point of time

(Atjkinson 1975:1986). The very mention of poverty actually conjures up images of destitution,

hunger, homelessness, or to put it simply to a general deprivation.

Poverty is a phenomenon which is world-wide and its incidence differs from society to

society. However, it is largely seen in developing nations, in fact, the world is dichotomized into

South and North which represent poor and rich countries respectively. A caution needs to be

taken here as each country or region has its standards of measurement teardowns defining

poverty. Poverty is in fact a relative concept whereby people are regarded as poor if they suffer

from relative deprivation, i.e., if they do not have access to the diets, comforts and the standard

of living which are customary in their society (Atkinson 1975).

Given the complexity of this concept it would be of significance to list out the various

definitions of poverty.

Rouwfree was the first in Britain to discuss in detail the problem involved in defining

poverty and clearly saw his approach as being based on absolute line. According to him, a family

was considered to be living in poverty if its total earnings were insufficient to obtain the

minimum necessities for the maintenance of merely physical requirements (Pulley 1989).

The shorter concise English Dictionary (1993) describes poverty as the state of being

poor; want of necessities to life. This means having little or no wealth or material possession,

indigence and destitution want in various degrees.

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Peter Townsend observes that people are deprived of conditions of life which ordinarily

define membership of society and that if they lack or denied resources to obtain access to these

conditions of life and thereby full membership of society, they are in poverty (1970:76-81).

Ahluwalia (1978) observes poverty as a complete assessment of trends in rural poverty

that should take into account several dimensions of poverty, of which income or consumption

level per head is only one equally relevant and factors such as longevity, access to health and

education facilities, and perhaps also security of consumption levels from extreme shocks.

Kurien (1978) views poverty as the socio-economic phenomenon whereby the resources

available to a society are used to satisfy the wants of few while many do not have even their

basic needs met.

These definitions would perhaps provide an inking as to the conceptual difficulties faced

while defining poverty. As stated earlier, poverty is not a concept, which can be defined within a

single parameter, as it is not the question of mere hunger or homelessness, alone which would go

into the definitions of poverty. In fact poverty is linked to the whole of other factors and it forms

a link with other constraints, which govern our system. The presence of poverty does not just

refer to the particular political, social or economic system, but in fact, it is closely linked to the

system as a whole. Therefore, the study of poverty requires a historic approach.

1.3). CAUSES OF PROVERTY

The causes of poverty may be varied and multiple. It would be presumptuous to assume

that poverty can be attributed to a single cause. The causes of poverty can range from political,

social to economic. The causes of poverty may vary from region to region, society to society or

from nation t nation.

Some of the general causes of poverty are:-

1) The people are poor because they prefer it that way.

2) Low productivity per unit of Labor.

3) The country is naturally poor. This seems the obvious answer where the soil is sparse and

unwanted, the forests thin and the subsoil barren.

4) Inequitable distribution of infrastructure including different means of production.

5) Inception of new agricultural strategy has benefited only selected rich farmer community.

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6) The country is poor because it has been kept in a state of colonial oppression. The British,

French and Dutch were in business not for their subject people but for themselves. The

people are still paying for these centuries of indifference, exploitation and neglect.

7) Failure to implement land reforms.

8) Poverty is the consequence of class exploitation. The counter part of the poverty of the

many is the opulence of the few. The second is the cause of the first.

9) Under utilization of natural resources.

10) Inequalities in land ownership and concentration of tangible wealth in few pockets.

11) Unfavorable credit policy.

12) Poverty is caused by insufficient capital. Low income allows of no saving without saving,

there is nothing to invest.

13) Over-population is the cause of poverty.

14) Poverty is caused by incompetent economic policy.

Poverty is caused by ignorance. It is plausible axiom that no literate population in the world is

really poor and no illiterate population is otherwise.

1.4). Poverty alleviation programmes

India has a very long history of experimenting with various approaches to rural

development. Even in the pre-independence era, a number of rural reconstruction experiments

were initiated by nationalist thinkers and social reformers.

Well known among were the Gurgaon Experiment of F.L.Brayne(1920), the Marthanndam

experiment of Spencer Hatch(1921), the Sriniketan experiments of Ravindranath

Tagore(1020s), the Swegram experiment of Mahatma Gandhi (1933), the Firka Development

Scheme(1946) and Etawali pilot Project of Albert Mayer (1948) (Singh 1986).

After independence came the Grow More Food campaign, the review of which resulted in

the National Community Development Programme. Two basic premises were fundamental in the

decision to create such a programme in 1952 (Ensminger 1983.3)

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1. The overall development of the rural community can be brought about only with the

effective participation of the people backed by the co-ordination of technical and other

services necessary for securing the best from such initiative and self help.

2. The problems of rural development have to be viewed from a historic perspective and the

efforts to solve them have to be multi-faced.

The central objective of the Community Development programme is to secure the total

development of the material human resources of rural areas and to develop local leadership and

self-governing institutions. The basic idea is to raise the levels of living of rural people through a

number of programmes. This objective was to be attained by bringing about a rapid increase in

food and agricultural production by strengthening programmes of resource development. Such as

minor irrigation and soil conversation by improving the effectiveness of farm inputs, supply

systems and by providing agriculture extension service to the farmers.

The Community Development programme (CDP) was formerly incorporated on October

2, 1952. It was extended to be the first step in a programme of intensive development which was

expected over a period of time to cover the entire country. Initially, it was launched in the fifty-

five project area located in different parts of the country. Another 110 areas had to be necessarily

added to the original fifty-five in the course of six months. Demands for the expansion of

Community Developmental Programme from members in the State Legislatures and from

members of parliament continued to sky-rocket. It was difficult to resist the mounting political

pressure to expand the programme.

Originally, each of the fifty-five projects was to embrace approximately 300 villages with

a population of about 2,00,000 people and cover a cultivated area of approximately 1,50,000

acres. But the Community Development programme, now covers all the rural areas in the

country.

The other Poverty Alleviation Programmes are:

i). INTENSIVE AGRICULTURE DISTRICT PROGRAMME

The Intensive Agricultural District Programme(IADP), popularly known as the package

programme, represents a significant departure in approach from the Community Development

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Programme (CDP), in that it employed the concentration principle in developing resources as

opposed to the equity criterion used in CDP. Its basic premise was that India needed to organize

its agriculture production with enough resources to make it effective.

The programme began in response to the food crisis in 1957-58. The Government of

India initiated an agricultural production team from the USA in January 1959, to study the

countrys food production problems to make recommendations for a coordinated effort to

increase agriculture production on an emergency basis. The team suggested a 10 point

programme to increase food production (Government of India 1963).

As its immediate goal, the IADP sought to achieve rapid increase in agricultural

production through a concentration of financial, technical and administrative resources. Its aim,

in the long run, was to achieve a self generating breakthrough in productivity and raise the

production potential by stimulating the human and physical resources of change.

The State Governments selected seven districts for the implementation of the IADP

Thanjavaur (Tamilnadu), West Godavari (A.P), Shahabad (Bihar),Raipur (M.P), Aligarh

(U.P),ludiana (Panjab) and Pali (Rajasthan). The Government of India approved the

implementation of the programme in seven districts in June 1980 and suggested that the schemes

be implemented in one district in each of the fifteen states of the country. The seven districts

were delimited into 140 community development blocks with 14,038 villages and a total grass

cropped area of about 45 lakh hectares.

ii).SPECIAL GROUP AND AREA SPECIFIC PROGRAMME

The failure of the growth oriented strategy of the sixties to make any significance on the

problems of rural poverty and unemployment led to its re-examination in the late sixties.

Inequitable distribution of the benefits of the growth-oriented programmes between prosperous

and backward areas and between rich and poor households within an area was officially

acknowledged and corrective measures in the form of group specific and area specific

programmes were initiated in the early seventies. While the growth rate of agricultural

production was still not satisfactory, distribution was not to wait any longer; the faith in the

trickledown theory had been completely eroded.

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iii). SMALL FARMER DEVELOPMENT AGENCY (SFDA)

The report of the all India Rural Credit Review Committtee (1969) recommended the

establishment of an agency to assist the small farmers who had not benefited from the gains of

the Green Revolution.

Accordingly, the Fourth Plan laid special emphasis in enabling the share in its benefits.

To achieve this objective the plan provided for the initiation of a project, namely the Small

Farmer Development Agency Scheme. The SFDA scheme was sanctioned during 1970-71 but

the actual implementation started only during 1971-72.

The objective of the SFDA was to ensure the availability of the small farmers. An

Autonomous Agency, registered under the Registration of Societies Act 1860, was established at

the district level to implement the SFDA project. It acted as a catalyst in identifying small

farmers, investigating their problems and helping them to obtain inputs from various

development organizations.

iv). MARGINAL FARMERS AND AGRICULTURAL LABOURS (MFAL) SCHEME

The MFAL was launched in 1970-71 following the recommendation of the All India

Rural Credit Review Committee (1969). Its objective was to assist the marginal farmers (with

land holding below 2.5 acres) and agricultural labourers to improve their productivity and

income through a variety of activities like crop husbandry including multiple cropping, increased

use of new inputs, water harvesting techniques, mirror irrigation, livestock, poultry and fisher

period, 15,000 marginal farmers and 5,000 agricultural labourers- those defined as owning a

homestead and deriving more than 50 per cent of their family income from agricultural wages.

v). DROUGHT-PRONE AREA PROGRAMME (DRAP)

The rural Works Programme was initiated in 1970-71 with the focus on the execution of

rural works and employment generation is an attempt to mitigate the condition of scarcity in

drought-prone acres. It was introduced in the year 1975 to combat frequent recurrence of

drought. Matching share of 50-50 between Central and State. The programme was sought to be

reoriented on the basis of an area development approach and was redesigned as the Drought-

prone Area Programme at time of midterm appraisal of the Fourth Five Year Plan.

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The program is in operation in seventy four districts spread over thirteen states which

were identified as prone to drought on the basis of objective criteria such as low exent of

irrigated area, low and erratic distribution of rainfall and high periodicity of drought.

The basic objectives of the Programme are:

1) To reduce the severity of the impact of drought.

2) Stabilizing the income of the people particularly weaker sections of the society and

3) Restoration of ecological balance.

The other notable programmes are the Desert Development Programme (DDP), Hill Areas

Development Programme (HADP), Tribal Areas Development Programme (TADP).

Integrated Wasteland Development Programme (IWDP):- It was introduced in 1991 with 100 per

cent Central assistance to check the soil erosion and marginalization of lands.

vi). NATIONAL RURAL EMPLOYMENT PROGRAMME (NREP)

To eradicate the problem of rural employment and under employment, what is required is

a multi-pronged strategy which should aim on the one hand, at resource development of

vulnerable section of the population, and on the other, should provide supplementary

employment opportunities to the rural poor, particularly during lean periods, in a manner which

can, at the same time, contribute directly to the creation of durable assets for the community.

In 1960-61, 36 Rural Works Projects were launched all over the country. It was envisaged that

annual employment of 100 days would be created for 1,00,000 persons in the first year using a

total of 25 lakh persons in the final year of the Third Plan. The project to be undertaken included

irrigation, road construction, village housing and soil conversation. Essentially, the projects were

meant to be labour intensive with a minimum expenditure on materials and machinery. The exact

nature of each project was to be determined by the requirements of the particular area. The

execution of projects was to be determined by the requirements of the particular area. The

execution of projects was to be concentrated in the slck periods when normal agricultural

operation offered little opportunities for employment. The wages were in no case to exceed the

rate prevailing in the area, so as to ensure that no one who had other employment was attracted

to rural works (Government of India 1961-77).

The major programmes of the series were the Crash Scheme of Rural Employment

Project (CSRE), Pilot Intensive Rural Employment Project (PIREP), Employment Guarantee

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Scheme (EGS),Food For Work Programme (FFWP), National Rural Employment Programme

(NREP), Rural Landless Employment Guarantee Programme (RLEGP).

The NREP was launched as a centrally sponsored scheme in 1980 to replace the earlier

Food For Work Programme. It was hoped that this programme would provide supplementary

employment to the rural poor on projects which would create community assets. Under this

programme it was specified that the ratio of material to wage costs be roughly 60:40 and the

wage to be offered be on par with minimum agricultural wages prevalent in different areas. A

part of the wage payment was to be paid in the form of food grains.

vii). INTEGRATED RURAL DEVELOPMENT PROGRAMME

Progressive reduction and ultimate eradication of poverty has been of the major goals of

Indian economic policy since the beginning of the Fifty Five Year Plan.

The Sixth Plan launched a direct attack on the basic problems of Rural Poverty and

Unemployment. In 1979-80, an estimated 51 per cent of the population lived below the poverty

line which corresponded to a consumer expenditure of Rs.76 per capital per month in rural areas

and Rs. 88 in urban areas. This came down to 37 per cent by the terminal year of the Sixth Plan

1984-85. The government expected the rate to fall further 23 per cent by the end of the Seventh

Plan. This was part of a long term plan to cut poverty rate by 10 per cent by the end of the Eighth

Plan (1994-95). In pursuance of this strategy, the seventh plan gave a wider base to the IRDP by

integrating it more effectively with agricultural and other rural development programmes.

The IRDP is the single largest anti-poverty programme currently underway in all the

community development blocks in the country. It was launched in 1978-79 in 2,300 selected

blocks in the country and was extended to all the 5,011 blocks with effect from October 2,1980.

It aims at providing income generating assets and employment opportunities to the rural poor to

enable them to rise above the poverty line once and forever. The IRDP in effect seeks to re-

distribute assets and employment opportunities in favour of the rural poor.

The IRDPs target group consists of the poorest of the rural poor under the following

categories: a cultivator with a holding of 5 acres or below is a small is a marginal farmer; a

person without any land, but with or without a homestead and deriving more than 50 per cent of

his income from agricultural wages is an agricultural labourer; a person whose total income from

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huge-earning does not exceed Rs.200 per month is a non-agricultural labourer.(Government of

India 1980 b 3-4)

The IRDB was financed by the Government of India and the Sate Government on ratio of

50-50. During the Sixth Plan period, the number of poor families assisted under the IRDB was

1656 million which was 110.4 per cent of the target of 15 million. The total expenditure on

government subsides amounted to Rs. 1650.27 crores. The total bank credit mobilized for the

IRDP was Rs. 3,080,41 crores which represented 103 per cent achievement of the target of Rs.

3,000 crores. Some 65 lakhs Scheduled Caste, Scheduled Tribe families (39 per cent of the total

beneficiaries) benefited from the programme as against the target of 45 million, recording an

achievement of 144.4 per cent.

viii). JAWAHAR ROZGAR YOJANA

The Jawahar Rozgar Yojana (JRY), a major wage employment programme, was launched

in the last year of the Seventh Plan, i.e. on April 1, 1989, by merging the two ongoing Wage-

employment Programmes viz; National Rural Emplyment Programme (NREP) and Rural

Landless Employment Guarantee Programme (RLEGP) (Rao 1992: 18).

JRY is expected to generate nearly 1000 million man days of employment per annum, the

Centres contribution to the expenditure being 80 per cent and the States share 20 per cent (Rao

1992). JRY is being implemented in three phases. The second and third phase were introduced

in 1993-94(CMIE 1996:262)

1. Under the first phase, 75 per cent of the funds allocated annually were utilized for the

implementation of the programme through out the country.

2. Under the second phase, 20 per cent of the funds allocated were provided to 120

backward districts of the country where there was a concentration of unemployment and

under employment. It is known as Intensified Jawahar Rojgar Yozana.

3. Under the third phase, 5 per cent of the funds were earmarked for the prevention of

migration of labour and enhancing women employment. It is called as Innovative and

Special Employment Scheme.

The first phase of the JRY alone includes two sub-schemes.

1. Indira Awaas Yojana(IAY)

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2. Million Wells Scheme (MWS)

1) The IAY aims at provided dwelling units free of cost to sc and ST, free bonded labourers

in rural areas from 1993-94, the scheme has been extended to non SC/ST rural poor,

below the poverty line, subject to the condition that the expenditure on such people

should not exceed 4 percent of the total allocation under JRY.

2) The MW Scheme provides for open well, free of cost to poor small and marginal farmers,

belonging to SC and ST and freed bonded labourers.

ix). EMPLOYMENT ASSURANCE SCHEME (EAS)

The EAS programme came into force from October 2, 1993. The scheme has the two

folded objectives of 1) providing employment to those who are in need of work during the lean

agriculture periods and Creating community assets in the villages. In addition, as specified in the

guidelines, at least 100 days of employment should be assured to both men and women between

the age group of 18 to 60 years. The expenditure incurred under this scheme is being shared

between the Centre and the State in the ratio 80:20. The scope of scheme at the national level

spreads to around 1,752 blocks of 261 districts where the Revamped Public Distribution System

(RPDS) is in operation.

x). PUBLIC DISTRIBUTION SYSTEM (PDS)

The prime objective of Public Distribution System is to achieve a more equitable

distribution of food grains and more specifically to meet the minimum food requirements of the

low-income consumers at fair and reasonable prices or controlled prices. In terms of financial

expenses and people covered under the PDS has been the governments major policy measure to

ensure food security to the poor by subsiding rations or rice, wheat, sugar, kerosene oil and

edible oil. The governments have been initiating some innovative measure to strengthen the

operation.

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1.5). OVERVIEW OF APGVB BANK AND ITS SERVICES

By amalgamation, on 31st march, 2006 of the 5 banks namely Sri Visakha Grameena

bank, Nagarjuna Grameena Bank, Sangameswara Grameena Bank, Manjira grameena bank and

Kakathiya Grameena Bank, the Andhra Pradesh Grameena Vikas Bank was intiated with the

financial support by SBI, to participate more energetically, with synergy, in the uplift and

development of Rural Fram Sector and Rural Non-Farm Sector, with emphasis on the deprived,

the Rural Poor, Rural ISB and Rural Crafts.

The headquarters of the bank is located Warangal district. And the bank is covering eight

districts namely Mahbubnagar, Nalgonda, medak, Warangal, Khammam, Visakhapatnam,

Vizianagaram, Srikakulam district. The ownership ratio of the bank is as follows:

1. Share of Government of India - 50%

2. Government of Andhra Pradesh 15%

3. State Bank of India 35%

The bank have 524 branches in operation and over 2200 staff working for execution of

the bank operations. TABLE - 1

APGVB BRANCHES IN ANDHRAPRADESH

S.no Name of the district No. of Branches

1 Khammam 75

2 Nalgonda 80

3 Mahabubnagr 78

4 Medak 70

5 Srikakulam 57

6 Vishakhapatnam 57

7 Vizajayanagaram 56

8 Warangal 51

Total 524

Source;www.apgvb.com

Some of the important Loans and Advance schemes helping for the alleviation of poverty

are:

1. Agriculture cash credits ( Crop loans)

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2. Loans for Education Vidya Vikas

3. Karshak Vikas Loans to farmers against Mortgage of agricultural property

4. Rural Housing Grammeena Gruha vikas

5. SHD Federations

6. Financing of Matured SHGs for farm production

7. Palamitra Dairy Vikas Scheme

8. Laghu Vikas Swarojgar Credit Card

9. Rythu Vikas chakra

10. Vanitha Vikas etc.

1.5). NEED AND IMPORTANCE OF THE STUDY

The RRBs have crucial role to play in the poverty alleviation in India. Alleviation of

poverty remains a major challenge before the Government. While there has been a steady

decline in rural poverty over the last two decades, yet there is still lot to be covered. The

economic growth of the nation hugely depends on the poverty alleviation. The RRBs mobilizing

the resources in the form of deposits and borrowings from apex institutions like NABARD and

sponsor bank are concentrating on poverty alleviation schemes. While growth will continue to

be the prime mover, anti-poverty programmes supplement the growth effort and protect the poor

from destitution, sharp fluctuations in employment and incomes and social insecurity. The

specifically designed anti-poverty programmes for generation of both self-employment and

wage-employment in rural areas will improve the sustainable development in the rural India and

decreases the poverty. Hence, the present study aims at analyzing the performance of RRBs with

a special focus on the APGVB Bank on Poverty alleviation schemes. The study is important

because it not only analyzes the performance of APGVB in the implementation of poverty

alleviation programmes but also provide contribution to other researchers, banks to concentrate

on implementation and maintenance of poverty alleviation schemes in India.

1.6). PROBLEM OF THE STUDY

The present research study investigates the problem of Performance evaluation of

RRBs a study of APGVB in Warangal district with special focus on poverty alleviation

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schemes. The study covers this problem by studying the APGVB Bank in the implementation

and maintenance of poverty alleviation schemes.

1.7). REVIEW OF LITERATURE

In the wake of nationalism of commercial banks and their growing involvement with the

rural development schemes sponsored by the Government during the past few years, a

considerable volume of literature has emerged dealing with various aspects of the new role

played by the RRBs as financial intermediaries in the process of rural development. Prior to the

nationalization of commercial banks, a few studies sponsored by the official and non-official

agencies dealing with the role of RRBs were notable. However to the best of our knowledge

barring a few stray attempts, no systematic and empirical studies on the role of RRBs in the

sphere of poverty alleviation in the Andhra Pradesh state, i.e., Andhra, Telangana and

Rayalaseema regions were carried out by any agency or individual.

Most of the studies undertaken on RRBs have presented their findings in the form of

research articles, unpublished M.Phil and PhD dissertations in various research centers. Efforts

to review a few reports and other literature on various aspects of rural credit, agricultural finance,

rural development poverty_ alleviation schemes etc. relevant for the present study have been

made here. Here, an attempt is made to briefly review the research findings of few studies.

Among the studies conducted on RRBs the reports of working groups appointed occupied

a significant place. Among these a special mention may be made about the Mr. M. Narasimham

(1975). The working group noted that the major strength of the cooperative credit institutions lies

in the local feel of the village society and that of commercial banks in the professional

management of the business of banking. It recommended the setting up of state sponsored

regionally based and rural oriented commercial banks. It also envisaged a new institution which

combines the local and familiarity with rural problems which co-operatives possess and the

degree of business organization, ability to mobilize, deposits, access to central money markets

and a modernized outlook which the commercial bank have.

The working group also recommended that the consumption loans could be provided by

these banks to the poorest sections of rural masses to a specified limit despite the assumption that

their concentration should be towards production credit.

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The group reviewed the functioning of the co-operatives and Commercial Banks in

disbursement of rural credit and found that both the institutions were not able to cater to the

requirements of the rural poor. Therefore, the committee felt that RRBs have to be created with

the participation of Central and State Govt. under the sponsorship of a Commercial Bank. The

group has broadly outlined the way in which these banks are to be organized to meet the

challenges of rural credit. This report is considered very important as RRBs emerged on the

recommendations of this working group.

The credit for initiating the first study on RRBs goes to the Reserve Bank of India. For

this purpose, a committee was set up in June, 1977 under the chairmanship of Professor M.L.

Dantwala to review the working of RRBs in the light of the objectives for which they were setup,

to indicate their precise role in the rural credit structure and to make recommendations with

regard to their scope, methods, and procedures. The main conclusion of the committee was that

with suitable modification in their organization and functions, the RRBs could become a very

useful component in the totality of the rural credit structure. The committee was convinced that

within a short span of two years, the RRBs had demonstrated their ability to achieve the purpose

for which they were established. The committee also discussed various issues related to the

financial viability of these banks and concluded that the financial reports obtained on their

working did show that the RRBs possess a potential and capability to attain viability and become

a profit making institution.

The committee to Review Arrangements for Industrial Credit for Agriculture and Rural

Development (CRAFICARD) 1979, headed by Sri B. Siva Raman, recommended for the

establishment of a National Bank for Agriculture and Rural Development under the control of

RBI to decentralize its functions. It made several suggestions for improving the rural credit like:

(1) identification of target groups like small/ marginal farmers, rural artisans, Scheduled Caste

and Scheduled Tribe. (2) Simplification of terms and procedures of credit, (3) updating of land-

records and (4) project lending. The main recommendation is that preference should be given to

RRBs in regard to licensing of branches to the rural areas because of its low cost operations and

much concentration on weaker sections. Regarding over dues it did not favour the state

governments giving total exceptions to all classes of defaulters. It described that there should be

strict observance of financial discipline by all concerned for sound and sustained growth of the

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Rural Banks Credit system in India. Based on the recommendations of this committee,

NABARD was established on 1st 1982.

Another committee set up by under RBI under the chairmanship of Sri Sundravardhan

committee in 1980 to suggest appropriate guidelines for uniform system of internal management

of rural banks and their branches. They suggested various aspects of internal management to be

strengthened.

Further, a working group was constituted by the Govt. of India in 1984 under the

Chairmanship of S.M.Kelkar to go into various aspects of the functioning of RRBs and make

suitable recommendations for further policy.

The Kelkar working group found that the RRBs could cover considerable part of the rural

participation through its branch network at a comparatively lower cost of operation and with the

local involvement through appropriate staffing pattern. The group felt that the operations of

RRBs are more in time with the national objectives of serving the weaker section. However, the

group recommended that more attention should be paid to the consolidation of existing RRBs. In

addition, it was felt that initiative should be taken to establish new RRBs in the areas where

weaker sections are large in number. The group also recommended that the State Governments

should play a major role in helping the RRBs in the recovery of over dues. The group also made

several other recommendations regarding the viability, participations of NABARD, Credit

Deposit Ratio (CDR), the relations between sponsoring that the measures

In the year 1987 Mr. V. Anand Kumar a Research Scholar conducted a study on the

organization and management of RRBs in A.P. with special references to Nagarjuna Grameena

Bank (NGB) during 1978-1985. In his thesis, an attempt has been made to evaluate the

performance of RRBs in A.P. in general an NGB in particular. His study is mainly concerned

with deposits, advances, recoveries of loans, and working performance of NGB. Further, his

study is focused on the impact of banking operations on the rural masses.

Dr. M. Sunder Rao and K. Umamahesh Patnaik have published an article on the impact

of Shri Vishaka Grameena Bank (SVGB) on beneficiary households. They have concluded that

the impact was significant interns of the income levels, consumption position, improvement in

family employment, level of infrastructure etc.

Sri Venkateshwarlu (1990) made a study on rural credit by Grameena Banks with special

reference to Golkonda Grameena Banks in A.P. in this study the author has examined the role of

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Grameena Banks In rural development. The study concluded that the RRBs performance in

providing credit is impressive which in turn helps in development of rural areas.

Mr. Ssinha Roy (1994) has made a study on comparative performance of 8 RRBs in West

Bengal. The performance is evaluated in terms of branch expansion, growth in deposits,

advances, credit deposit ratio, and profits/loss. The study concluded that the working of RRBs in

West Bengal showed a remarkable trend in respect of deposits and advances but most of the

RRBs suffered losses in many of the years.

Smt. Sita Kumari (1995) evaluated the performance of KGB and SSGB in A.P. in this

study an attempt is made to evaluate the comparative performance of KGB and SSGB in terms of

resource mobilization credit dispensation, recovery and other aspects related to operational

performance.

Sri K. Someshwar Rao(1996) examined in his study the economic viability of RRBs in A.

P. A comparative study of Sri Saraswathi Grameena Bank has been undertaken. This study has

examined the economic viability of selected banks by attempting cost- volume-profit analysis.

His study has also enquired into the working of selected RRBs in A.P in terms of deposits,

advances, over dues, capital investments in fixed assets etc. The study concluded that RRBs are

becoming unviable not because of the increasing operating cost but mainly due to the

commitment of RRBs in financing the Govt. sponsored schemes, priority sector advances,

restriction in banking operations and banking in unstable and complex environment.

Subbaraidu and others have examined in their study the role of rural banks in the

implementation of IRDP. They concluded that banks should assume full responsibility through

continuous evaluation. They also suggested that a separate cell have to be created for the

effective implementation of the IRDP.

R.K. Mittal has conducted a study on the performance evaluation of RRBs with a focus

on Hisar-sirsa Kshetriya Grameena bank, Hisar. The another has examined the profitability of

Rural Bank on the basis of nineteen profitability parameters.

A few other studies of Mr. Sinha, Punna Rao& Satyanarayana, Navin Chandra Joshi,

Anand, Shankaraiah & Bhagavan Reddy, Banoo Prem Kumar Pandya, Jagat Ram, J.P. Dupey,

Mandal & Reshamwala, Asif Ali Khan, and Nawab Ali Khan, M.L. Pagaria & Dr. Ram Jass

Yadav, Sajla Kalra & Karam Singh, examined the performance and working of RRBs in general

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and their findings are consistent with the research findings and conclusions of other research

studies.

1.8). OBJECTIVES OF THE STUDY

The research study titled Performance evaluation of RRBs a study of APGVB in

Warangal district with special focus on poverty alleviation schemes is aimed to achieve the

following objectives.

1. To study the evolution of RRBs with special reference to APGVB and the operational

performance of RRBs at macro level.

2. To examine the performance of APGVB in the implementation of poverty alleviation

schemes sponsored by Government agencies.

3. To examine the nature and extent of rural development achieved through APGVB Bank in

terms of assistance to poorest of the poor.

4. To assess the customer perception about the lending policies and recovery performance of

the bank.

5. To investigate the problems involved in the implementation of poverty alleviation schemes

by the bank

6. Finally to offer suitable suggestions for improvement of performance of APGVB.

6). SCOPE OF THE STUDY

The study covers the problem of investigation of the implementation of poverty

alleviation schemes by RRBs with a special focus on APGVB bank only. The study does not

cover the other schemes implemented by the APGVB bank. The study also restricted to the

opinion of select beneficiaries (respondents of Warangal District).

7). RESEARCH METHODOLOGY

The methodology to be adopted for collection of the data, selection of samples, and

analysis of data and interpretation of data is discussed below.

i). Collection of data

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The data for the research study will be collected from using both the sources of data. The

primary data will be collected through a questionnaire used for the beneficiaries and bank

managers. Further, the observation, direct interview will also be adopted as part of primary data

collection. The secondary data will be collected from existing sources which include various

reports of APGVB bank and RRB reports and also researches done on the present problem,

internet, books, magazines and journals etc.

ii). Sampling Technique & Sample Size

While selecting the samples, the convenience sampling technique will be applied. For

the purpose of obtaining information and analyzing the data, the sample size of 255 customers

and 51 managers will be selected. These 255 samples include the beneficiaries who are getting

the services from the APGVB Bank of Warangal District and residing in Warangal District.

The detailed table is given below.

TABLE - 2

S. no Branch name Branch code No. of

Respondents

1 AKNEPALLY 5101 05

2 AKU.GHANPUR 5102 05

3 AZAMNAR 5103 05

4 BACHANNAPET 5104 05

5 BALAPALA 5105 05

6 BHUPALAPALLY 5106 057 BHUDHARAOPET 5107 05

8 CHALLAGARIGE 5108 05

9 CHELPUR 5149 05

10 DAMERA 5109 05

11 DHARMASAGAR 5152 05

12 DPO 5151 05

13 ELLANDA 5110 05

14 ENUGALLU 5142 05

15 FORT WARANGAL 5111 05

16 GHANPUR MULUGU 5144 05

17 GHANPUR Stn 5112 0518 HANAMKONDA 5113 05

19 HASNPARTY 5147 05

20 JANGAON 5114 05

21 KASHIBUGGA 5115 05

22 KAZIPET 5116 05

23 KESAMUDRAM 5117 05

24 KHANAPUR 5148 05

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25 KOMURAVELLY 5118 05

26 KORIVI 5119 05

27 KOTHAPALLY GORI 5120 05

28 LINGALA GHANPUR 5121 05

29 MAHABUBABAD 5122 05

30 MALLAMPALLY 5123 0531 MALLUR 5124 05

32 MAMNOOR 5150 05

33 MANDAPALLY 5125 05

34 MARIPEDA 5126 05

35 MUCHERLA 5127 05

36 MULUG 5128 05

37 NALLABELLY 5129 05

38 NANCHARIMADUR 5130 05

39 NEKKONDA 5131 05

40 OORUGONDA 5132 05

41 PALAKURTHY 5133 0542 PARKAL 5134 05

43 PASARA 5135 05

44 RAGHUNATHPALLY 5146 05

45 REGONDA 5136 05

46 SANGEM 5141 05

47 TEKUMATLA 5138 05

48 THARIGOPPULA 5137 05

49 THORRUR 5139 05

50 VENKATAPUR 5140 05

51 ZAFFARGADH 5143 05

Total 255

iii). Hypothesis Statement

For the present research study, the following hypothesis statements will be used.

1. Financing by the bank under poverty alleviation schemes has improved the economic

position of the borrower.

2. The bank management is efficient in ensuring the proper utilization of loans by the

borrowers.

3. Employment in rural areas has been increased by adopting different schemes by bank.

vi). Techniques Applied

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For the purpose of analyzing the statistical information, the following techniques will be

used for the study.

They are

1. Correlation Analysis

2. ANOVA (Analysis of Variance)

3. Factor Analysis

4. Scaling techniques

vii). Method of Presentation

While presenting the data, tables and charts will be used at relevant places.

Abbreviations will be used for the terms which are repeated a number of times. The index of

abbreviations will be given at the beginning for ready reference.

8). LIMITATIONS OF THE STUDY

The proposed research study will be restricted to Poverty Alleviation schemes of APGVB

Bank only. The study further restricted to the scheme implementation to the people of Warangal

District only.

9).CHAPTERISATION SCHEME

Keeping in view of the objectives, the study will be organized into 6 chapters,

including introduction and conclusions.

CHAPTER I: Introduction

This chapter I presents the introductory part of the research which include

introduction to the RRBs, conceptual frame work of poverty alleviation in India, Government

regulations, need and importance of the study, objectives, scope, methodology and limitations of

the study.

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CHAPTER II: Evolution of RRBs and overview of APGVB Bank

This chapter presents the evolution of Regional rural banks and the evolution of APGVB

bank. This chapter also aims at presenting the various acts that were passed and the government

initiatives in the development of APGVB bank.

CHAPTER III: Performance evaluation of APGVB with reference to Poverty Alleviation

schemes.

This chapter proposed to provide analytical evaluation with reference to the evaluation of

the APGVBs performance regarding poverty alleviation schemes implementation. This chapter

also proposes the various problems in the implementation of the poverty alleviation schemes.

CHAPTER IV: Role of APGVB in Rural Development

This particular chapter focuses on the success of the APGVB in achievement of rural

development through its poverty alleviation schemes. This chapter also studies the coverage of

the scheme and its result in the rural development.

CHAPTER V: Analysis of Survey results

This chapter aims at providing the survey on the beneficiaries of the scheme and their

opinions and perceptions regarding the performance of the APGVB with reference to the poverty

alleviation schemes.

CHAPTER VI:Summary and Conclusions

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This chapter presents the conclusions and suggestions emerged from the study.

REFERENCES

Books:

1. GOI Report on the working group of the RRBs(1984)

2. C. GananDesingan Poverty eradication a Road map, Employment News, 16-22 October

2004 P.3.

3. Krishnama Raju. S., Bank Finance and Rural Development, New Delhi; Discovery

Publishing House, 1992.

4. Rayudu C. S., Agricultural Credit and Rural Development. New Delhi; Concept

Publishing Company, 1992.

5. Verma M.L. Rural Banking in India , Rawat Publications, Jaipur, 1988.

6. Maheshwari, S.R., Rural Development in India, Sage Publications, New Delhi, 1985.

7. Wadhva Charan D., Rural Banks for Rural Development, Macmillan Company, Madras,

1980.

ARTICLES

1. Kaul, R.K., Role of Banks in uplifting people above the line of poverty, Prajnan, April

June, 1982.

2. Bhupat M. Desai and Namboodri., Policy Strategy and Instruments for Alleviation of

Rural Poverty ,- Economic and Political Weekly, Vol.33,No.41,1998.

3. GOAP(2003) Consolidating Andhra Pradesh s Poverty Eradication Action Plans,

Government of Andhra Pradesh, Hyderabad.

4. Dr. Neeraja Sharma., Role of RRBs in Poverty Alleviation Through Micro, Book Marksand Share, 13 January 2011.

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WEBSITES

1.www.google.com

2.www.wikipedia.org

3. www.apgvb.com

4. www.rbi.org.in

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