Agencies New Delhi

The finance ministry on Thursday said from May 1, 28 RRBs with over 22,000 branches spanning across 700 districts will function across the country as 'One State One RRB' comes into effect. “Amalgamation of 26 Regional Rural Banks (RRBs) in 11 States/UT takes effect from today, marking a significant step toward strong RRBs, better governance, improved credit flow and financial inclusion,” Department of Financial Services said in a post on X.

On April 8, the Department of Financial Services notified the amalgamation of 26 RRBs on the principles of 'One State One RRB'. This was the fourth phase of the amalgamation of RRBs. Considering the improvement in the efficiency of the RRBs due to amalgamations in the past, the MoF rolled out an amalgamation plan in November 2024 for consultation with stakeholders.

After consultation with stakeholders, amalgamation of 26 RRBs in 10 States and 1 UT have been carried out with primary focus on improvement in scale efficiency and cost rationalization. Post the latest amalgamation, there will be 28 RRBs in 26 states and 2 UTs with more than 22,000 branches covering 700 districts. Their predominant area of operation is in rural areas with approximately 92% of branches in rural or semi urban areas.

In the previous three phases--Phase-I (2006-2010) number of RRBs was reduced from 196 to 82, Phase-2 (2013-2015) number of RRBs was reduced from 82 to 56 and Phase-3 (2019-2021) the number of RRBs were reduced from 56 to 43. RRBs were established to develop the rural economy by providing, for the development of agriculture, trade, commerce, industry and other productive activities in the rural areas, credit and other facilities, to small and marginal farmers.