FinMin to hold high-level talks on 'One State, One RRB' execution on May 6

The Union finance ministry is scheduled to hold a meeting with the chairpersons of all Regional Rural Banks (RRBs) on May 6 to discuss execution strategies and the implementation roadmap for the state-wise amalgamation of RRBs, a senior government official said.

 

“A national-level review meeting of RRBs will be held under the chairmanship of M Nagaraju, secretary, Department of Financial Services (DFS), on May 6 at Vigyan Bhawan in New Delhi," the official said, requesting anonymity.

 

The official further added that the meeting will include a discussion on the performance of the RRBs in FY25.

 

On April 7, the Union government released a gazette notification announcing the amalgamation of several RRBs, effective from May 1, 2025.

 

In line with the powers granted under Section 23A(1) of the Regional Rural Banks Act, 1976, the notification stipulates that these RRBs within a state will merge into a single entity, inheriting their respective properties, powers, rights, obligations and duties.

 

The new structure is aimed at improving the efficiency of the RRBs and minimising competition among the public sector banks that sponsor them, as part of the Union finance ministry's “One State, One RRB” policy.

 

This large-scale amalgamation is expected to streamline operations, enhance the financial strength of the RRBs, and improve their ability to serve rural communities more effectively. Each new RRB will operate under the sponsorship of a major public sector bank (PSB), ensuring greater financial stability and operational efficiency.

 

RRBs were established regionally and are oriented towards rural areas, with capital contributed by the Government of India, state governments and sponsor banks under the RRB Act, 1976.

 

The largest public sector lender, State Bank of India (SBI), sponsors the most number of RRBs (14), followed by Punjab National Bank (nine) and Canara Bank (four). Bank of Baroda, Bank of India and Indian Bank sponsor three RRBs each; Central Bank of India sponsors two; UCO Bank, Jammu and Kashmir Bank, Indian Overseas Bank, Union Bank of India and Bank of Maharashtra sponsor one each.

 

Among the states, Andhra Pradesh, Uttar Pradesh and West Bengal have three RRBs each, while Bihar, Gujarat, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Rajasthan and Telangana have two RRBs each.

 

RRBs reported their highest-ever consolidated net profit of Rs 7,571 crore for FY24, with a gross non-performing assets (GNPA) ratio of 6.1 per cent — the lowest in 10 years.