The correct answer is 1 and 2 only. Explanation & Key Takeaways: • Regional Rural Banks (RRB): • RRBs were set up as state-sponsored, regionally based and rural oriented institutions under the Regional Rural Banks Act, 1976. • RRBs are regulated by the Reserve Bank of India and are supervised by NABARD. Hence statement 1 is correct. • RRBs are jointly owned by the Centre, the state government concerned and sponsor banks with the issued capital shared in the proportion of 50%, 15% and 35%, respectively. Hence statement 2 is correct. • RBI allowed RRBs to access the liquidity adjustment facility (LAF), marginal standing facility (MSF) and call or notice money market. Hence statement 3 is not correct. • The mandate of RRBs is to: • Serve the credit needs of the small and marginal farmers, agricultural labourers, socio-economically weaker sections of the population for the development of agriculture, trade, commerce, industry and other productive activities. • Reduce regional imbalances and increase rural employment generation activities. • Develop such measures which could restrict the outflow of rural deposits to urban areas.