Agriculture and rural sector plays a vital role in  economic as well as overall development of India, hence it becomes necessary to make strategy for raising income and generating employment  in rural areas , to make programs for poverty alleviation in unbanked rural areas , to develop appropriate institutions and mechanisms for meeting the credit requirements of rural sector. Setting up of Regional Rural Banks (RRBs) in the mid-seventies was a major initiative in this direction. The RRBs are specialized rural financial institutions for meeting the credit requirement of  small and marginal farmers, agricultural laborers, artisans and small entrepreneurs and to help in the development of rural economy. However, commercial and co-operative banks were also there to cater the credit requirements of the rural sector. While the commercial banks, with their focus on profitability had certain limitations in accelerating agricultural credit; the cooperative banks efforts were also hampered by several financial weaknesses. Though over the years the Regional Rural Banks have been able to expand their outreach and business and meet the credit requirements of the poor . But now in present scenario , several weaknesses have also emerged which eroded their profitability and viability like overdue, recovery of loans, nonperforming assets etc. Regional Rural Banks plays an important role in credit delivery in rural areas by providing credit facility to economically weaker section of population for the development of agriculture, trade and industry. Inspite of the above functions the commercial viability of RRBs has been challenged due to its limited business flexibility, smaller size of loan & high risk. So, there is a need to study the financial performance of Regional rural Banks in India. This paper is an attempt to analyze the present level of financial performance of RRBs in India as on 31st March 2017. The study is based on secondary data collected from annual reports of NABARD and RBI. An analytical research design of “Key Performance Indicators Analysis” such as number of banks and branches, number of districts covered , growth rate of bank branches , growth rate of district covered ,deposits, advances and growth rate index is discussed in the present paper. The study finds and concludes that financial performance of Regional rural Banks has significantly improved.

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Keywords: Regional Rural Banks, Rural Development, Growth Rate.