Regional Rural Banks (RRBs): They are financial institutions that ensure adequate credit for agriculture and other rural sectors. Hence, Statement 1 is correct. They were set up on the recommendations of the Narasimham Working Group ( 1975 ). Hence, Statement 2 is correct. RRBs were granted legal provisions under the Regional Rural Banks Act, 1976. The first Regional Rural Bank “ Prathama Grameen Bank ” was set up on 2 nd October 1975 . Hence, Statement 3 is correct. The equity of a regional rural bank is held by the Central Government , concerned State Government and the Sponsor Bank in the proportion of 50:15:35 . The RRBs have combined characteristics of a cooperative and a commercial bank. It operates within the local limits as notified by the Government. The main objectives of RRBs are To provide credit and other facilities to the small and marginal farmers, agricultural labourers, artisans, and small entrepreneurs in rural areas. To check the outflow of rural deposits to urban areas. To reduce regional imbalances. To increase rural employment generation . They are required to provide 75% of their total credit as priority sector lending.