Boosting Rural Lending: 'One State, One RRB' Revamps Banking Landscape

The 'One State, One RRB' initiative will enhance lending in agriculture, MSME, and government schemes. RRBs, now over 22,000 branches strong, aim for growth through a strategic amalgamation plan. The focus remains on improving financial performance, with a recent Rs 7,148 crore profit and reduced GNPA.

An ambitious initiative, 'One State, One RRB', aims to bolster lending activities within regional rural banks (RRBs), particularly targeting the agricultural sector, MSMEs, and government-sponsored schemes, as outlined by Financial Services Secretary M Nagaraju on Monday.

During a performance review meeting for RRBs and discussions regarding their amalgamation, Nagaraju urged both sponsor banks and RRBs to identify upcoming challenges. Notably, RRBs have expanded to more than 22,000 branches across 700 districts, predominantly in rural and semi-urban regions, according to a statement from the finance ministry.

The RRBs reported a consolidated net profit of Rs 7,148 crore for the fiscal year 2024-25, achieving a historically low Gross Non-Performing Assets (GNPA) rate of 5.3%. With the transition to 'One State, One RRB' as of May 1, 26 banks have been combined into standalone entities. This move reduces the total number of RRBs from 43 to 28, enhancing their viability and financial metrics.

(With inputs from agencies.)