According to the Reserve Bank's report on `Trend and Progress of Banking in India (1998-99)', the number of profit-making RRBs during the period increased to 132 from 109. The operating profits of these RRBs more than doubled to Rs 304.66 crore from Rs 114.47 crore.

On the deposit mobilisation side, RRBs raised Rs 25,4288 crore, an increase of 21.2 per cent from Rs 20,977 crore. Advances stood at Rs 11,016 crore, an increase of 13.7 per cent from Rs 9,687 crore.

The ratio of operating profits to total assets also showed more than a two-fold increase to 0.93 per cent (0.43 per cent), and this adjusted for the decline in the ratio of provisions and contingencies to total assets to 0.23 per cent (0.26 per cent).

Net-profit ratio showed more than a four-fold increase to 0.70 per cent (0.16 per cent). "The increase in profitability, can be attributed, inter alia, to both a decline in ratio of distintermediation costs to total assets and an increase in the spread", says the Reserve Bank report.

The intermediation cost-ratio declined by 0.2 percentage points to 2.7 per cent, and this is due to a drop in the wage ratio to 2.4 per cent (2.5 per cent). The spread of 177 RRBs improved to 3.2 per cent (2.8 per cent).

On the asset quality side, the Reserve Bank says that the share of standard assets in the total loans increased steadily from 56.9 per cent at end-March'96; 63.2 per cent at end-March'97; and then to 67.2 per cent at end-March'98 while the share of non-performing assets declined from 43.1 per cent to 36.8 per cent and 32.8 per cent during the same period.