Streamlining Regional Rural Banks For Enhanced Effectivity And Progress

Beginning subsequent month, the federal government will implement the “one state-one RRB” plan by merging 15 regional rural banks throughout 11 states to enhance effectivity and cut back prices.

With this fourth spherical of consolidation, the full variety of RRBs will drop from 43 to twenty-eight.

Beneath the plan, Andhra Pradesh, Uttar Pradesh, West Bengal, Bihar, Gujarat, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha and Rajasthan, may have one merged RRB. This course of, as outlined in a authorities notification, will take impact on Could 1, 2026. These mergers intention to serve public curiosity, improve native improvement, and profit RRBs.

For instance, Andhra Pradesh’s 4 RRBs will merge into Andhra Pradesh Grameena Financial institution, headquartered in Amravati and sponsored by Union Financial institution of India. Equally, Uttar Pradesh’s three RRBs will merge into Uttar Pradesh Gramin Financial institution, headquartered in Lucknow, and West Bengal’s three RRBs will kind West Bengal Gramin Financial institution, headquartered within the state capital.

In eight states, two RRBs will merge into one. As an example, Bihar Gramin Financial institution might be shaped from Dakshin Bihar Gramin Financial institution and Uttar Bihar Gramin Financial institution, with its headquarters in Patna. Gujarat Gramin Financial institution will end result from the merger of Baroda Gujarat Gramin Financial institution and Saurashtra Gramin Financial institution, headquartered in Vadodara. Jammu and Kashmir Grameen Financial institution might be created by merging J&Ok Grameen Financial institution and Ellaquai Dehati Financial institution, headquartered in Jammu.

Every merged RRB may have an authorised capital of Rs 2,000 crore, supported by prior authorities capital infusions. In 2021-22, the federal government allotted Rs 5,445 crore over two years to strengthen RRBs, resulting in record-breaking efficiency in 2023-24. The RRBs achieved a internet revenue of Rs 7,571 crore, a excessive capital adequacy ratio of 14.2%, and their finest asset high quality up to now decade, with Gross Non-Performing Belongings at 6.1%.

The RRBs, established below the RRB Act of 1976, intention to supply credit score and help to small farmers, agricultural employees, and artisans in rural areas. Structural consolidation of RRBs started in 2004-05, lowering the variety of RRBs from 196 to 43 by way of three merger phases earlier than the present consolidation efforts.