RRBs Streamlined: A Look at the Latest Amalgamation Phase

The Ministry of Finance has sanctioned the amalgamation of 26 Regional Rural Banks into a more streamlined structure, focusing on efficiency and cost-saving measures. This change is part of the fourth phase of consolidation under the 'One State One RRB' policy, enhancing economies of scale and operational effectiveness.

The Ministry of Finance has officially announced the consolidation of 26 Regional Rural Banks (RRBs), following the 'One State One RRB' principle, marking the fourth phase of this ongoing amalgamation strategy. This initiative aims to boost the efficiency and cost-effectiveness of RRBs across the country.

In light of successful past mergers, the Ministry initiated consultations for this latest phase in November 2024, engaging stakeholders extensively. The plan culminated in the merger of 26 RRBs operating in 10 states and 1 Union Territory. The objective is to enhance scale efficiency and reduce costs, ultimately benefiting the rural banking sector.

Currently, 43 RRBs function across 26 states and 2 UTs. After this amalgamation, 28 RRBs will remain, covering over 22,000 branches in 700 districts. Despite these changes, the sector remains deeply rooted in rural regions, with 92% of branches serving rural and semi-urban areas, highlighting the RRBs' commitment to rural development.

(With inputs from agencies.)