Abstract
However, the banking sector has witnessed a huge growth in the recent years. Despite such a growth, the credit flow by banks to the rural and agricultural sectors remains dismal, which, more or less, has resulted in financial exclusion of the rural masses. Regional rural banks have to play up major role to finance and provide landings to agriculture sector at diminishing rate of interest in order to grow the economy and GDP. It requires better financial management of the RRBs. The purpose of this study is to examine the impact of operational efficiency on profitability in RRBs. This study concentrates on the principles of bank management for assets and liabilities. The study helps in efficiency in financial management and reduces the misuse of funds, proper estimation of total financial requirements, proper mobilisation, utilisation of finance, maintaining proper cash flow, to increase efficiency, reduce cost of capital and maximize the profit in long run of RRBs.