New Delhi: In a significant move to streamline rural banking operations, the Department of Financial Services (DFS) has notified the amalgamation of 26 Regional Rural Banks (RRBs) across 10 states and one Union Territory under the One State One RRB plan.
The Ministry of Finance confirmed the development in an official statement, marking the fourth phase of consolidation since the inception of RRBs.
The merger follows a comprehensive consultation process initiated in November 2024, aimed at enhancing operational efficiency and reducing costs.
With this step, the number of RRBs functioning in the country has been reduced from 43 to 28. These banks now operate across 26 states and two Union Territories, with a vast network of over 22,000 branches spanning more than 700 districts.
Additionally, it has been stated that nearly 92 per cent of these branches serve rural and semi-urban regions, continuing the mandate of bringing formal credit closer to India’s agrarian communities.
As per the official gazette notification, the undertakings of the transferor banks will vest in the transferee banks from the effective date of amalgamation.
The transferee RRBs will also have the authority to deploy staff across the new, expanded areas of operation as deemed necessary for improved service delivery and public interest.
The Ministry of Finance emphasized that past amalgamations have led to performance gains for RRBs, and this latest consolidation aims to build on that momentum, positioning the banks to better serve rural India’s evolving financial needs.
The gazette notification states:
“Whereas the Central Government, after consultation with the National Bank for Agriculture and Rural Development, the Government of Andhra Pradesh and the Union Bank of India, Canara Bank, Indian Bank and State Bank of India, being the Sponsor Banks of Chaitanya Godavari Grameena Bank, Andhra Pragathi Grameena Bank, Saptagiri Grameena Bank and Andhra Pradesh Grameena Vikas Bank, is of the opinion that it is necessary in the public interest and in the interest of the development of the area served by the aforesaid Regional Rural Banks and also in the interest of the said Regional Rural Banks themselves, that the said Regional Rural Banks shall be amalgamated into a single Regional Rural Bank.”
It should be noted that the fourth phase of RRB amalgamation will be effective 1 May. As per the gazette notification issued on 5 April, the changes align with the One State One RRB plan to boost operational efficiency and rural banking outreach.
Among the major consolidations, Andhra Pradesh will now have a single entity—Andhra Pradesh Grameena Bank—formed by merging Chaitanya Godavari Grameena Bank, Andhra Pragathi Grameena Bank, Saptagiri Grameena Bank, and Andhra Pradesh Grameena Vikas Bank. The new bank, headquartered in Amravati, will operate under Union Bank of India’s sponsorship, with an authorised capital of Rs 2,000 crore. All assets, liabilities, and ongoing legal proceedings of the four banks will transfer to the new entity, while employee services and benefits will remain unchanged. A committee involving NABARD and the sponsor bank will resolve seniority matters.
Similar consolidations have occurred across other states: Bihar Gramin Bank has been formed in Patna by merging Dakshin Bihar Gramin Bank and Uttar Bihar Gramin Bank under Punjab National Bank’s sponsorship; Gujarat Gramin Bank in Vadodara, combining Baroda Gujarat Gramin Bank and Saurashtra Gramin Bank under Bank of Baroda; and Jammu and Kashmir Grameen Bank in Jammu, formed by merging J&K Grameen Bank and Ellaquai Dehati Bank under The Jammu and Kashmir Bank Ltd. Karnataka now has a unified Karnataka Grameena Bank (Ballari), sponsored by Canara Bank, while Madhya Pradesh Gramin Bank (Indore) is the result of merging Madhya Pradesh Gramin Bank and Madhyanchal Gramin Bank under Bank of India’s sponsorship.
Other significant amalgamations include formation of Maharashtra Gramin Bank (Chhatrapati Sambhajinagar) under Bank of Maharashtra; Odisha Grameen Bank (Bhubaneswar) under Indian Overseas Bank; and Rajasthan Gramin Bank (Jaipur) under State Bank of India. Uttar Pradesh now has Uttar Pradesh Gramin Bank (Lucknow), formed by merging Baroda UP Bank, Aryavart Bank and Prathama UP Gramin Bank, while West Bengal Gramin Bank (Kolkata) is the result of the merger of Bangiya Gramin Vikash, Paschim Banga Gramin Bank and Uttarbanga Kshetriya Gramin Bank, under Punjab National Bank’s sponsorship.
These mergers aim to streamline banking operations, improve service delivery in rural areas, and ensure better utilisation of banking infrastructure nationwide.
Regional Rural Banks or RRBs, first established in 1975, were created to boost the rural economy by supporting agriculture, trade, small enterprises and artisans, particularly targeting small and marginal farmers and low-income groups.
Over the years, consolidation of RRBs has been pursued in phases, which are Phase One (2006–2010) that saw a reduction from 196 to 82 banks, Phase Two (2013–2015) brought the number down to 56 and then Phase Three (2019–2021) further narrowed the count to 43.
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