Regional Rural Bank (RRBs) the youngest member of the rural credit family is always the point of discussion since its inception. Although it has its own space in the whole rural credit system and contributed a lot for the development of rural economy. The purpose of this article is to analyse the rationale for setting up of RRBs and see its prospects in near future. The author concludes that the RRBs are able to meet their primary objective of serving as a bank to the common man and observed, majority of them have transformed into profitable units. The recommendations focus on how the profitability of all RRBs can be sustained in the future. The focus is on what measures should be taken so that all RRBs can serve as profitable institution on a sustainable basis while maintaining its unique characteristics of serving as a small man’s bank.

Keywords: Regional Rural Banks, Profitability of Banks.