One State-One RRB: 43 Regional Rural Banks to Become 28
Why in the news
The Union Finance Ministry is set to roll out One State-One RRB, a reform to improve efficiency and cut costs by folding 43 Regional Rural Banks into 28.
Key facts
- 15 RRBs will be merged across states.
- Andhra Pradesh has 4 RRBs; Uttar Pradesh and West Bengal have 3 each.
- Bihar, Gujarat, J&K, Karnataka, Madhya Pradesh, Maharashtra, Odisha and Rajasthan have 2 each.
- In Telangana, asset-liability split between Andhra Pradesh Grameena Vikas Bank and Telangana Grameena Bank is finalised.
- This is the fourth and final round, after three phases begun in 2004-05 that cut RRBs from 196 to 43 by 2020-21.
Performance snapshot
| Indicator | Value |
|---|---|
| Capital support by Centre (two years from FY 2021-22) | ₹5,445 crore |
| Consolidated net profit, FY 2023-24 | ₹7,571 crore (highest ever) |
| Capital adequacy (March 31, 2024) | 14.2% |
| GNPA | 6.1% (lowest in a decade) |
| Branches | 22,069 in 26 states and 3 UTs |
| Districts covered | 700 |
About RRBs
- Set up under the RRB Act, 1976 to serve small and marginal farmers, agricultural labourers and rural artisans.
- Shareholding: Centre 50%, sponsor banks 35%, states 15%.
- After the 2015 amendment, Centre plus sponsor banks must still hold at least 51%.
- UTs covered: Puducherry, Jammu & Kashmir and Ladakh.
Significance
- Streamlined operations and better credit flow, aligned with the Viksit Bharat goal.
- Growing use of digital banking services.
Exam angle
- Governing law: RRB Act, 1976.
- Number of RRBs: 196 earlier, 43 now, 28 after merger.
- Minimum Centre plus sponsor-bank holding: 51%.