Explanation:

Regional Rural Banks (RRB)
Regional Rural Banks are scheduled commercial banks (Government bank) operating at regional level in different States of India. They have been created with a view to serve primarily the rural areas of India with basic banking and financial services. However, RRBs may have branches set up for urban operations and their area of operation may include urban areas too.
The area of operation of RRBs is limited to the area as notified by Government of India covering one or more districts in the State. RRBs also perform a variety of different functions. RRBs perform various functions in following heads:
•Providing banking facilities to rural and semi-urban areas.
•Carrying out government operations like disbursement of wages of MGNREGA workers, distribution of pensions etc.
•Providing Para-Banking facilities like locker facilities, debit and credit cards.
The rural banks had the legislative backing of the Regional Rural Banks Act 1976. This act allowed the government to set up banks from time to time wherever it considered necessary.
The RRBs were owned by three entities with their respective shares as follows:
•Central Government → 50%
•State government → 15%
•Sponsor bank → 35%
Regional Rural Banks were conceived as low cost institutions having a rural ethos, local feel and pro poor focus. Every bank was to be sponsored by a “Public Sector Bank”, however, they were planned as the self sustaining credit institution which were able to refinance their internal resources in themselves and were excepted from the statutory preemptions.
Regional Rural Banks are regulated by National Bank for Agriculture and Rural Development (NABARD).