One State, One RRB’ Model

Context:

The Department of Financial Services under the Ministry of Finance has notified the merger of 26 Regional Rural Banks (RRBs) to streamline rural banking under the ‘One State, One RRB‘ strategy. This marks the fourth phase of RRB consolidation, aimed at improving efficiency, cost-effectiveness, and scale in rural banking operations.

Key Highlights

• RRBs Merged: 26
• States/UTs Affected: 11 states and 1 Union Territory
• Post-Merger Total RRBs: 28 (down from 43)
• Coverage: Over 22,000 branches across 700 districts
• Rural Focus: Around 92% of branches are in rural or semi-urban areas
• Effective Date: May 1, 2026
• Legal Basis: Section 23A(1) of the Regional Rural Banks Act, 1976

States Undergoing RRB Mergers

• Four RRBs Merged in Andhra Pradesh:
  • Chaitanya Godavari Grameena Bank
  • Andhra Pragathi Grameena Bank
  • Saptagiri Grameena Bank
  • Andhra Pradesh Grameena Vikas Bank
    → Merged Entity: Andhra Pradesh Grameena Bank
• Three RRBs Each Merged in:
  • Uttar Pradesh
  • West Bengal
• Two RRBs Merged in Each of the Following States:
  • Bihar
  • Gujarat
  • Jammu & Kashmir
  • Karnataka
  • Madhya Pradesh
  • Maharashtra
  • Odisha
  • Rajasthan

Historical Context of RRB Consolidation

Objectives of the Merger

• Enhance operational efficiency and scalability
• Enable cost rationalization through unified back-end systems
• Strengthen credit delivery in rural areas
• Reduce duplication of services across similar geographies
• Foster faster rollout of government welfare schemes

Mint