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One State-One RRB Policy
Context: The Ministry of Finance has notified the fourth phase of consolidation of Regional Rural Banks (RRBs) to implement the ‘One State-One RRB’ policy. A total of 26 RRBs in 11 states and 1 Union Territory will be amalgamated into 11 new RRBs. The total number of RRBs will be reduced from 43 to 28, with 22,000+ branches across 700 districts.
Objectives of the Policy
| Phase | Period | No. of RRBs |
| Pre-consolidation | Before FY06 | 196 |
| Phase I | FY06–FY10 | Reduced to 82 |
| Phase II | FY13–FY15 | Reduced to 56 |
| Phase III | FY19–FY21 | Reduced to 43 |
| Phase IV | May 1, 2025 | Reduced to 28 |
- Enhance operational efficiency and scale economies.
- Rationalise costs and reduce redundancy.
- Improve the quality of rural credit delivery.
- Strengthen governance and financial performance.
- Reduces intra-state competition between RRBs.
- Boosts financial inclusion and digital banking in rural areas.
- Prepares RRBs for future capital raising and regulatory compliance.
One RRB per state formed in:
- Andhra Pradesh
- Merged banks: Chaitanya Godavari, Andhra Pragathi, Saptagiri, Andhra Pradesh Grameena Vikas
- New name: Andhra Pradesh Grameena Bank
- Sponsor Bank: Union Bank of India
- Uttar Pradesh
- Merged banks: Baroda UP Bank, Aryavart Bank, Prathama UP Gramin Bank
- New name: Uttar Pradesh Gramin Bank
- Sponsor Bank: Bank of Baroda
- West Bengal
- Merged banks: Bangiya Gramin Vikash, Paschim Banga Gramin, Uttarbanga Kshetriya Gramin
- New name: West Bengal Gramin Bank
- Sponsor: Notified
- Bihar
- Dakshin Bihar Gramin and Uttar Bihar Gramin merged to form Bihar Gramin Bank
- Sponsor: Punjab National Bank
- Gujarat
Governance & Financials of RRBs
- Each Regional Rural Bank (RRB) will have an authorised capital of ₹2,000 crore.
- The ownership structure is divided among three stakeholders: the Central Government holds a 50% stake, the sponsor bank holds 35%, and the respective State Government holds 15%.
- Following recent amendments to the RRB Act, external capital raising is now permitted. However, it is mandated that the combined holding of the Central Government and the sponsor bank must not fall below 51% to retain public sector control.
- In terms of performance for the financial year 2023–24, RRBs collectively posted their highest-ever net profit of ₹7,571 crore. The Capital Adequacy Ratio (CAR) reached an all-time high of 14.2%, indicating strong financial health. Additionally, the Gross Non-Performing Assets (GNPA) ratio stood at 6.1%, marking the lowest level in the past decade.
- Baroda Gujarat Gramin and Saurashtra Gramin merged to form Gujarat Gramin Bank
- HQ: Vadodara
- Sponsor: Bank of Baroda
- Jammu & Kashmir
- J&K Grameen Bank and Ellaquai Dehati Bank merged to form Jammu and Kashmir Grameen Bank
- HQ: Jammu
- Sponsor: J&K Bank
- Karnataka
- Madhya Pradesh
- Maharashtra
- Odisha
- Rajasthan
- (Each of the above states had two RRBs, which are now merged into one per state).
