RRBs must boost their lending in agriculture, allied activities: DFS secy

With the implementation of "One State, One RRB", regional rural banks will expand their lending in agriculture and allied activities, MSME and government-sponsored schemes, Financial Services Secretary M Nagaraju said on Monday.

During a meeting to review the performance of the regional rural banks (RRBs) and the progress on their amalgamation plan, Nagaraju asked the sponsor banks and RRBs to recognise the challenges that lie ahead.

The RRBs have grown in their reach to more than 22,000 branches, covering 700 districts in the country, and more than 92 per cent of their branches are in rural and semi-urban areas, the finance ministry said in a statement. 

The RRBs recorded a consolidated net profit of Rs 7,148 crore in 2024-25.

The Gross Non-Performing Assets (GNPA) have reached a new low of 5.3 per cent, the lowest in a 10-year period, the ministry said.

During the meeting chaired by the secretary, it was decided that the sponsor banks, in consultation with the RRBs, will draft a five-year roadmap for the latter.

Nagaraju urged the rural banks to continue to focus on their amalgamation process and long-term sustainability.

The sponsor banks have been asked to guide the RRBs in their amalgamation process and provide a level-playing field for long-term sustainability, he said. 

The sponsor banks should continue to facilitate technology upgrades in the RRBs and complete the integration process, adhering to the strict timeline of September 30, the ministry said.

Nagaraju also suggested that the sponsor banks and RRBs address the human resource-related issues emerging in the process.

Effective May 1, "One State, One RRB" is there with amalgamation.

Under "One State, One RRB", 26 regional rural banks across 11 states and Union territories have been amalgamated into standalone RRBs.

The amalgamation has reduced the number of RRBs from 43 to 28, to further improve the viability and financial performance of the rural banks.