FinMin seeks comments from sponsor banks on proposed RRB amalgamation

The Union Finance Ministry has sought comments from sponsor banks by November 20 for the proposed amalgamation of regional rural banks (RRBs), according to a document seen by Business Standard.

 

The proposed document said the RRB with the largest business (total deposits and advances) among the amalgamating RRBs in a state would be the transferee RRB in that state.

 

Also the sponsor bank of the transferee RRB, which has the largest business volume and branch network, would become the sponsor bank of the amalgamated RRB.

 

A common syntax may be adopted while deciding the new name of the RRB.

 

“The core banking solution (CBS) platform for the amalgamated entity should generally be the one already being utilised by the transferee RRB. This will minimise costs and time associated with data migration / CBS integration,” said the document.

 

“Given the rural expansion of RRBs and agro-climatic / geographical ethos and in order to retain the USP of RRBs viz. closeness to communities, it is needed to embark on further consolidation of RRBs towards the goal of ‘One State-One RRB’ so as to derive the benefits of scale efficiency and cost rationalisation. Keeping this in view, a road map has been prepared in consultation with Nabard for further consolidation of RRBs (Phase IV amalgamation), which will bring down the number of RRBs to 28 from 43 at present,” added the document.