New Delhi [India]: The amalgamation of 26 Regional Rural Banks (RRBs) across 11 States and Union Territories has officially come into effect today, marking a major step in the restructuring of India’s rural banking network.
“Amalgamation of 26 Regional Rural Banks (RRBs) in 11 States/UT takes effect from today, marking a significant step toward strong RRBs, better governance, improved credit flow and financial inclusion,”
— Department of Financial Services posted on X.
The merger follows the notification issued by the Department of Financial Services (DFS) on April 8, under the principle of ‘One State One RRB’. This initiative represents the fourth phase of the amalgamation process.
The Ministry of Finance, recognizing improvements in efficiency from earlier phases, initiated the latest round of amalgamations in November 2024, involving consultations with stakeholders. The objective was to enhance scale efficiency and cost rationalization across the RRB network.
With this move:
- The number of RRBs has been reduced to 28, operating across 26 States and 2 Union Territories.
- These banks now operate over 22,000 branches, serving 700 districts nationwide.
- About 92% of branches are located in rural or semi-urban areas, reinforcing their mandate to serve the rural economy.
The RRB amalgamation has progressed in several phases:
- Phase I (FY 2006–2010): Reduced RRBs from 196 to 82
- Phase II (FY 2013–2015): Reduced from 82 to 56
- Phase III (FY 2019–2021): Brought down from 56 to 43
Originally established in 1975, Regional Rural Banks aim to develop rural economies by offering credit and banking services, especially to small and marginal farmers, artisans, agricultural laborers, and rural entrepreneurs.
This structural reform is expected to strengthen rural credit delivery, foster better governance, and push forward the government’s financial inclusion agenda.