Banking sector plays a pivotal role in the development of any economy. In India, time
and again, various reform measures were initiated to strengthen this sector. All such
measures emphasized on increasing the efficiency of banking operations and improving productivity. However, one thrust common to the banking sector across the transitional economies is to bring a large mass of population under the formal banking coverage. It is with this objective, the Regional Rural Banks (RRBs) were established in India. As a majority of the Indian population resides in rural areas, such banks bear tremendous potentialities to reach the rural unbanked inhabitants. This is of special significance in a region like northeast where a vast majority of population is greatly dependent on commercial banks and cooperative banks for meeting their banking requirements due to absence or limited presence of other types of financial intermediaries. RRBs since their inception have been playing a pivotal role in fostering balanced regional development through their wide network of bank branches. But, as in the case of any other financial institution, sound financial health of such institutions is also a precondition to effective participation in the process of financial intermediation. Furthermore, the mere spread of banking services across the length and breadth of a country is not adequate if there remains doubt about its sustainability. Thus, assessing the financial health and more specifically efficiency is important so as to gauge the future potentialities and sustainability of such institutions. Thus, the present study addresses this issue in the case of one of the RRBs operational in one of the northeastern state of India, i.e., Assam.