India's Regional Rural Banks: A Catalyst for Economic Growth

India's Regional Rural Banks (RRBs) are poised to bolster their economic role, with their business share rising to 5.2% of GDP by FY2030. This expansion, driven by the consolidation of RRBs, aligns with India's objective of becoming a USD 30 trillion economy by 2047.


Devdiscourse News Desk | Updated: 03-05-2025 12:23 IST | Created: 03-05-2025 12:23 IST
India's Regional Rural Banks: A Catalyst for Economic Growth
Representative image. Image Credit: ANI
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India's Regional Rural Banks (RRBs) are set to enhance their contribution to the nation's economy, with projections indicating their business will represent 5.2% of the GDP by the financial year 2030, up from 3.7% in FY24, according to a recent PwC report. This anticipated growth is expected to aid India in reaching its ambitious target of a USD 30 trillion economy by 2047.

The report follows the government's announcement regarding the amalgamation of 26 RRBs, emphasizing the strategy of 'One State One RRB'. As of April 8, the amalgamation was declared by the Department of Financial Services, marking the fourth phase in the consolidation series.

Set to be effective from May 1, 2025, the amalgamation covers RRBs across 11 states and Union Territories. This move reflects previous trends where amalgamations led to efficiency gains. The latest consolidation results in 28 RRBs operating in 26 states and 2 UTs, spanning over 22,000 branches across 700 districts, majorly in rural areas.

The RRBs were originally established in 1975 with a mission to develop rural economies by providing essential credit and support for agriculture, commerce, and small enterprises, particularly targeting small and marginal farmers, artisans, and rural entrepreneurs.

(With inputs from agencies.)

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