The government of India is set to implement the One-State-One-RRB (Regional Rural Bank) policy, aiming to streamline operations and strengthen the financial stability in rural banking institutes. Effective May 1, 2025, this initiative will consolidate 15 RRBs, reducing the total number from 43 to 28, as per the financial minister Nirmala Sitharaman.Â
In 11 states—Andhra Pradesh, Uttar Pradesh, West Bengal, Bihar, Gujarat, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha, and Rajasthan—regional rural banks are being merged into single entities..
Under Section 23A(1) of the Regional Rural Banks Act, 1976, these banks will merge into a single entity in the public interest and in the interest of the development of the area served by these entities.
The RRB plays a crucial role in providing credit and financial services to small farmers, agriculture labourers, and rural businesses. The net profit of RRB has increased from ₹4,974 crore in FY23 to ₹7,571 crore in FY24. The consolidated CRAR rose from 13.4 per cent as of March 2023 to an all-time high of 14.2 per cent by March 31, 2024.Â
Expected Benefits
The consolidation is expected to bring the following benefits-
- Enhance Financial StabilityÂ
- Improve Operational EfficiencyÂ
- Boots Technological Advancement
As the One-State-One-RRB policy takes effect, stakeholders anticipate significant improvements in service delivery, financial inclusion, and economic development in rural areas.
