Bank Mergers: Big News! 15 regional rural banks will be merged, government’s decision

The states whose RRBs will be merged include Andhra Pradesh (four), Uttar Pradesh and West Bengal (three each), and Bihar, Gujarat, Jammu and Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha and Rajasthan (two each).

Bank Mergers: Finance Ministry will soon launch the ‘One State-One RRB’ scheme to improve the operational efficiency and cost of Regional Rural Banks (RRBs). Under this scheme, 43 RRBs will be consolidated to 28. According to sources, most of the consolidation work has been completed and the fourth round will start soon. So far three phases of consolidation have been completed. Under the Finance Ministry’s plan, 15 RRBs located in different states will be merged.

RRBs of these states will be merged

The states whose RRBs will be merged include Andhra Pradesh (four), Uttar Pradesh and West Bengal (three each), and Bihar, Gujarat, Jammu and Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha and Rajasthan (two each). In the case of Telangana, the issue related to division of assets and liabilities of Andhra Pradesh Gramin Vikas Bank (APGVB) has been resolved.

The condition of RRBs improved

The financial year 2021-22 was important for RRBs, when the Center decided to infuse Rs 5,445 crore in two years for development capital. The performance of RRBs improved in FY 2023-24 and they recorded the highest consolidated net profit of Rs 7,571 crore. While their consolidated capital adequacy ratio was at a record high of 14.2 percent.

Rural banks have reduced from 196 to 43

The central government started structural consolidation of RRBs in FY 2004-05, due to which their number reduced from 196 to 43 by 2020-21. Regional Rural Banks were established under the RRB Act, 1976 with the objective of providing loans and other facilities to small farmers, agricultural laborers and artisans in rural areas.

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