After the merger, only two rural banks- Uttar Bihar and Madhya Bihar- will be left in the state, said Modi, who is also Bihar's Finance Minister.
The merger would increase the base capital of Madhya Bihar Grameen Bank which would help it in disbursing loans effectively, he said.
All the 15,00 employees of 376 branches spread in nine districts in five regional offices of the UCO Bank sponsored Bihar Grameen Bank would come under Madhya Bihar Grameen Bank, the Dy CM said.
Similarly, the business area of Punjab National Bank sponsored Madhya Bihar Grameen Bank would increase from 11 to 20 districts with the total number of branches increasing to 1078, the Finance Minister said.
The number of 196 rural banks were reduced to 82 in 2004-05 across the country in the first phase while it was further reduced to 56 in 2014-15 in the second phase, he said adding that there is a proposal to prune it further to 38 from existing 56 rural banks in the country.
With the Central government's approval, the NABARD (National Bank For Agriculture And Rural Development) has decided to reduce the number of rural banks of those sponsored banks which are handling the affairs of more than one rural bank, Modi said.
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