Transforming Rural Banking: 'One State-One RRB' Becomes Reality

The consolidation of 15 Regional Rural Banks across 11 states will be effective from May 1, 2026. This move, initiated by the finance ministry, aims to enhance operational efficiency and reduce costs, reducing the number of RRBs from 43 to 28, in pursuit of 'one state-one RRB.'

The finance ministry is set to implement a major consolidation of Regional Rural Banks (RRBs) as 'one state-one RRB' becomes a reality. Announced via a recent gazette notification, this initiative aims to streamline operations and rationalize costs, merging 15 RRBs across 11 states.

Effective from May 1, 2026, the fourth phase of RRB consolidation will see the number of banks reduce from 43 to 28. This effort underscores the pursuit of improved efficiency, with each state hosting a single RRB entity. States including Andhra Pradesh, Uttar Pradesh, and West Bengal will see significant mergers, each forming a unified RRB presence.

This shift follows extensive capital infusion and stakeholder consultations, aiming to boost the scale of operations in rural areas. Current statistics highlight 92% of RRB branches serving rural or semi-urban regions, emphasizing the critical role of these banks in rural credit and services.

(With inputs from agencies.)