RRBs, whose first batch was established in 1975, focus on rural banking and are owned by the central and state governments, and sponsoring banks
The got plans to reduce RRBs from 43 to 30 with a “One State, One RRB” model to improve efficiency and reduce competition with sponsor banks
Despite their rural presence, RRBs account for only 11-12% of agricultural credit, with scheduled commercial banks providing 80%
RRBs have accumulated losses of Rs 9,800 crore, even after receiving recapitalisation aid of Rs 10,890 crore in recent years
With commercial banks investing in technology and expanding rural services, RRBs face increasing difficulty in remaining competitive
Inefficient RRBs should be absorbed by sponsor banks, while stakeholders must ensure adequate capital to enhance RRBs' competitiveness