Government notifies amalgamation of Regional Rural banks on principles of 'One State One RRB'

This is the fourth phase of the amalgamation of RRBs.

Considering the improvement in the efficiency of the RRBs due to amalgamations in the past, the Ministry of Finance rolled out an amalgamation plan in November 2024 for consultation with stakeholders.

After consultation with stakeholders, amalgamation of 26 RRBs in 10 States and 1 UT have been carried out with primary focus on improvement in scale efficiency and cost rationalization.

At present, 43 RRBs are functioning in 26 States and 2 UTs.

Post amalgamation, there will be 28 RRBs in 26 states and 2 UTs with more than 22,000 branches covering 700 districts.

Their predominant area of operation is in rural areas with approximately 92 per cent of branches in rural or semi urban areas.

In the previous three phases -- Phase-I (FY 2006 to FY 2010) number of RRBs was reduced from 196 to 82, Phase-2 (FY 2013 - FY 2015) number of RRBs was reduced from 82 to 56 and Phase-3 (FY 2019 to FY 2021) the number of RRBs were reduced from 56 to 43.

From the effective date of amalgamation, the undertakings of the transferor Regional Rural Banks shall be transferred to and shall vest in the transferee Regional Rural Bank, as per the official gazette notification.

The transferee Regional Rural Bank shall have the power to post or appoint the employees in the interest of the bank and the public as a whole anywhere in the entire area of operation of the transferee Regional Rural Bank.

According to the Department of Financial Services' website, the Regional Rural Banks (RRBs) were established in 1975 to develop the rural economy by providing, for the development of agriculture, trade, commerce, industry and other productive activities in the rural areas, credit and other facilities, particularly to small and marginal farmers, agricultural labourers, artisans and small entrepreneurs. (ANI)