Finance Ministry's Strategic Move: 'One State-One RRB' Plan

The finance ministry will soon implement the 'One State-One RRB' plan to consolidate 43 regional rural banks to 28, aiming at operational efficiency. The process marks the latest phase in the long-standing consolidation effort of RRBs. The financial year 2023-24 saw significant performance improvements, including a record net profit of Rs 7,571 crore.

The finance ministry is gearing up to launch the 'One State-One RRB' plan, aiming to merge 43 regional rural banks (RRBs) into 28 for enhanced operational efficiency. Sources indicate that most consolidation processes are nearly complete, with a fourth round of amalgamations expecting to take place soon.

The ministry's roadmap indicates the merger of 15 RRBs operating across multiple states such as Andhra Pradesh, Uttar Pradesh, and West Bengal. Furthermore, Telangana has concluded the bifurcation of assets concerning Andhra Pradesh Grameena Vikas Bank and Telangana Grameena Bank.

The RRB sector experienced a pivotal year in 2021-22 with the Center's infusion of Rs 5,445 crore over two years, enhancing growth capital. As a result, RRBs achieved a landmark net profit and an all-time high capital adequacy ratio in 2023-24, while asset quality improved significantly as well.

(With inputs from agencies.)