(BS)
Starting May 1, 2025, Centre’s ‘One State One RRB’ policy comes into effect, which will significantly restructure the country’s Regional Rural Bank (RRB) network. As per a Finance Ministry announcement, 26 RRBs across 11 states and one Union Territory have been amalgamated, reducing the total number of RRBs from 43 to 28.
28 regional banks to serve 700 districts
The move aims to strengthen the operational efficiency, financial viability, and regional focus of RRBs. The new structure will see over 22,000 branches of 28 RRBs serving nearly 700 districts, with 92 per cent of these branches located in rural and semi-urban areas, reaffirming the original mandate of RRBs: to promote financial inclusion in rural India.
The amalgamation is being carried out under Section 23A(1) of the Regional Rural Banks Act, 1976, which allows such mergers in the public interest and for the development of the regions they serve.
“Now there will be 28 RRBs with over 22,000 branches spanning across 700 districts,” the DFS said in a post on X today.
RRBs to receive ₹2,000 crore capital
All restructured RRBs will have an authorised capital of ₹2,000 crore, giving them a stronger base for credit expansion and economic support in their respective states.
196 RRBs reduced to 43 since 2006
This reform marks the fourth major phase of RRB consolidation. Earlier phases between 2006 and 2021 had reduced the number of RRBs from 196 to 43. The current phase builds on the positive outcomes of earlier mergers, such as improved cost efficiency and better scale of operations.
State-wise regional bank consolidation
Under this new structure, each state will have a single consolidated RRB, unless the state had only one to begin with. For example:
Andhra Pradesh: Four RRBs—including Chaitanya Godavari Grameena Bank and Andhra Pradesh Grameena Vikas Bank—have merged into a unified Andhra Pradesh Grameena Bank, headquartered in Amaravati and sponsored by Union Bank of India.
Uttar Pradesh: Baroda UP Bank, Aryavart Bank, and Prathama UP Gramin Bank have merged into Uttar Pradesh Gramin Bank, based in Lucknow and sponsored by Bank of Baroda.
West Bengal: Three RRBs have merged into West Bengal Gramin Bank under the sponsorship of Punjab National Bank, with UCO Bank and Central Bank of India also involved in the earlier entities.
Similar two-bank mergers have taken place in Bihar, Gujarat, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha, and Rajasthan. For instance, Baroda Gujarat Gramin Bank and Saurashtra Gramin Bank now form Gujarat Gramin Bank, based in Vadodara and sponsored by Bank of Baroda. In Jammu & Kashmir, J&K Grameen Bank and Ellaquai Dehati Bank have merged into a single RRB under J&K Bank’s sponsorship.
