RRB Amalgamation: Finance Ministry Reviews Latest Merger Phase
Why in the news
A top-level meeting on January 30 was set to judge how Regional Rural Banks perform after their newest round of mergers.
Key facts
- Several RRBs of a State merge into one, under the RRB Act, 1976.
| Phase | Period | Outcome |
|---|---|---|
| I | 2005-2010 | Same-sponsor RRBs merged within a State |
| II | 2012-2014 | Further consolidation for scale |
| III | 2019-2021 | One RRB per sponsor bank per State |
| IV | Effective May 1 | Mostly one RRB per State; total 28 |
Objectives
- Stronger capital; lower costs and duplication.
- Better credit to agriculture, MSMEs and SHGs.
- Financial inclusion and governance.
Framework
- Regulator: RBI. Supervisor and refinancer: NABARD.
- Shareholding: Centre 50%, State 15%, sponsor bank 35%.
Exam angle
- Governing law: RRB Act, 1976.
- RRBs after Phase IV: 28.