Government Completes RRB Consolidation Under 'One State‑One RRB' Policy Slashing Numbers to 28.
Banking & Finance
On 1 May 2025, the Government of India implemented its ‘One State‑One RRB’ policy, reducing the number of Regional Rural Banks (RRBs) from 43 to 28, across 26 states and 2 Union Territories. The reform aims to enhance rural banking efficiency, cut costs, and boost financial inclusion nationwide.
- This marks the fourth phase of RRB consolidation since 2006 under the Regional Rural Banks Act, 1976. Initially, the number of RRBs fell from 196 (2006) to 43 (2021); now Phase IV reduces them further to 28 to support streamlined operations and stronger governance.
- The merger involves 26 RRBs across 11 states and 1 UT, now consolidated into 28 unified banks serving 700 districts via 22,000+ branches, approximately 92% in rural and semi‑urban areas. Each state now has a single RRB entity.
- Each new RRB is endowed with an authorized capital of ₹2,000 crore, allowing a stronger financial base for lending to small and marginal farmers, artisans, and rural entrepreneurs, while promoting deeper credit penetration in rural India.
Main Point :- (i) The 28 renamed and unified RRBs include newly formed banks such as Andhra Pradesh Grameena Bank, Uttar Pradesh Gramin Bank, Gujarat Gramin Bank, Karnataka Grameena Bank, Bihar Gramin Bank, and Odisha Grameen Bank, all established from multiple previous RRBs in their respective states.
(ii) Digital transformation is underway: NABARD has committed to complete full IT integration and new technology stack rollout for the merged RRBs by 15 September 2025, in order to deliver enhanced digital banking services and financial inclusion across rural India.
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