Regional Rural Banks To Undergo Major Consolidation From Today Under ‘One State-One RRB’ Policy; Details Here

The move is intended to strengthen the rural banking network by creating larger, more capable institutions with improved service delivery and operational efficiency

The restructured RRBs will have an authorised capital of Rs 2,000 crore, with a focus on better governance, improved management practices, and enhanced customer service

Source : PTI

Starting Thursday, May 1, 2025, India’s rural banking landscape is set to witness a significant structural change. As part of the Central government’s ‘One State-One RRB’ policy, the number of Regional Rural Banks (RRBs) will be reduced from 43 to 28 through a series of mergers aimed at streamlining operations and enhancing financial services in rural areas.

This consolidation, recently notified by the government, will affect RRBs operating in 11 states, including Andhra Pradesh, Uttar Pradesh, Bihar, West Bengal, Gujarat, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha, and Rajasthan. The move is intended to strengthen the rural banking network by creating larger, more capable institutions with improved service delivery and operational efficiency.

Mergers Across States

In Andhra Pradesh, four RRBs—Chaitanya Godavari Gramin Bank, Andhra Pragati Gramin Bank, Saptagiri Gramin Bank, and Andhra Pradesh Grameena Vikas Bank—will be merged into a single entity named Andhra Pradesh Gramin Bank, headquartered in Amravati. Union Bank of India will act as the sponsor bank.

Similarly, Uttar Pradesh will see the merger of Baroda UP Bank, Aryavart Bank, and Prathama UP Gramin Bank to form Uttar Pradesh Gramin Bank, with its head office in Lucknow and Bank of Baroda as the sponsor.

West Bengal’s three RRBs—Bangiya Gramin Vikas Bank, West Bengal Gramin Bank, and North Bengal Regional Rural Bank—will be integrated into West Bengal Gramin Bank.

In Bihar, the consolidation of South Bihar and North Bihar Gramin Banks will result in the formation of Bihar Gramin Bank, under the sponsorship of Punjab National Bank. Mergers will also occur in Gujarat, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha, and Rajasthan, reducing each state to a single RRB entity.

Improved Services And Stronger Banks

The restructured RRBs will have an authorised capital of Rs 2,000 crore, with a focus on better governance, improved management practices, and enhanced customer service. The larger scale and unified structure are expected to improve credit delivery and deepen financial inclusion in underserved areas.

Part Of A Larger Integration Process

This marks the fourth major consolidation drive in the history of RRBs. Between 2006 and 2010, the first phase reduced the number of rural banks from 196 to 82. The latest phase continues the effort to modernize the rural banking sector in alignment with the government’s broader financial inclusion goals.

Customers of existing RRBs are advised to stay informed about the changes and contact their branches for any updates regarding account transitions or operational changes.