Indian Government Implements 'One State, One RRB' Policy for Rural Banks
| Category | Details |
|---|---|
| Policy | "One State, One RRB" policy to consolidate 43 Regional Rural Banks (RRBs) into 28 for improved operational efficiency and cost-effectiveness. |
| Objective | Reduce competition, enhance service delivery, and strengthen financial positions of RRBs. |
| States Affected | Andhra Pradesh (4 RRBs), Uttar Pradesh (3 RRBs), West Bengal (3 RRBs), Bihar, Gujarat, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha, and Rajasthan (2 RRBs each). |
| Telangana Bifurcation | Completed bifurcation of assets/liabilities between Andhra Pradesh Grameena Vikas Bank (APGVB) and Telangana Grameena Bank. |
| Capital Infusion | Rs 5,445 crore infused in FY 2021-22 to support RRB operations. |
| Recent Performance | Record profit of Rs 7,571 crore in FY 2023-24; Capital Adequacy Ratio at 14.2%; Gross NPA at all-time low of 6.1% (as of March 31, 2024). |
| Historical Context | RRBs reduced from 196 to 43 through three phases (2004-05 to 2020-21). Established under the RRB Act, 1976, to serve rural credit needs. |
| 2015 RRB Amendments | Allowed RRBs to raise capital beyond the Centre, state governments, and sponsoring banks. Government retains 50% stake, sponsoring banks 35%, and state governments 15%. |
| Current RRB Network | 43 RRBs operational across 22,069 branches in 26 states and 3 Union Territories, covering 700 districts. Many RRBs now offer digital services for rural accessibility. |