ORIGIN OF THE BANK

Rural credit policy in India has had at its core the twin goals of bringing an increasing number of people within the formal financial system and using credit as an instrument of poverty alleviation. Several measures have been taken by Government of India and Reserve Bank of India, from time to time to achieve these goals. Even after commercial banks were brought into the field of Rural banking in the post nationalization scenario, a large segment of the rural population remained out side the fold of banking services. Therefore, the Govt. of India took a decision to establish a new set up regionally oriented rural banks which would combine the local feel, familiarity characteristic of co-operatives and professionalism and resource base of commercial banks. Following the recommendations of the committee, Regional Rural banks (RRBs) were set up first on 2nd October, 1975. Their number went up to 196 by the year 1987. 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 farmers, agricultural labourers, artisans and small entrepreneurs, and for matters connected therewith and incidental thereto. It was in the year 2004 that Government of India, decided to consolidate the RRBs into statelevel entities sponsored by same commercial bank. The amalgamation process began in September, 2005. Origin of Pragathi Gramin Bank The first RRB in south India was established by Canara Bank on 25.01.1976, by name Tungabhadra Gramin Bank. Subsequently, Canara Bank established and sponsored Chitradurga Gramin Bank, Kolar Gramin Bank and Sahyadri Gramin Banks in Karnataka State. All the above mentioned four RRBs were amalgamated and Pragathi Gramin Bank came into existence on 12.09.2005. Share Holding pattern of Pragathi Gramin Bank (Amt. in Crore) Particulars Share Capital Share Capital Deposit Total Capital Govt. of India 2.00 19.95 21.95 Canara Bank 1.40 13.97 15.37 Govt. of Karnataka 0.6 5.99 6.59

% Holding

50%

35%

15%

Market Share (in %) as at March 2011 (Amt. in Crore) No.of Branches 68 65 45 35 Branches Branch Network(in %) 30.00 45.77 27.37 29.91 28.03 37.50 34.83 12.78 Deposits(in %) 17.49 29.46 15.03 23.50 25.26 32.03 24.49 6.21 Advances O/s(in %) 11.66 32.80 17.22 23.80 23.14 22.02 33.72 5.36 Total Business(in %) 14.60 31.52 16.11 23.63 24.34 26.37 29.43 5.86

District Bellary Chitradurga Davanagere Kolar

Chikkaballapura 31 Koppal Raichur Shimoga 42 54 28

Bank's Business Position (Amt. in Crore) Year/Month 12th Sept.2005 March 2006 March 2007 March 2008 March 2009 March 2010 March 2011 Agg. Deposits 1326.49 1642.94 2006.19 2548.63 3222.32 4122.46 4812.60 Advances O/s 1374.05 1614.49 2025.29 2400.00 2986.66 3878.93 4349.51 Total Business 2700.54 3257.43 4031.48 4948.63 6208.98 8001.39 9162.11 20.62 23.76 22.75 25.47 28.87 14.50 % Increase