Fourth phase of merger of regional rural banks begins

New Delhi| The Finance Ministry has started the fourth phase of merger of Regional Rural Banks (RRBs). Under this, 15 RRBs will cease to exist in various states including UP. After the merger, the number of regional rural banks will decrease from 43 to 28. The Department of Financial Services, in a letter sent to the heads of public sector banks, said, to achieve the goal of one State-one Regional Rural Bank to maintain the agro-climatic or geographical nature and proximity of RRBs to communities, these banks will be further There is a need to consolidate. This will increase the efficiency of RRBs and also reduce costs.

Andhra Pradesh has the maximum number of four RRBs. Uttar Pradesh and West Bengal have three regional rural banks each, Bihar, Gujarat, Jammu and Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha and Rajasthan. They will merge under the goal of one state-one regional rural bank’. Let us tell you that the merger in Telangana will be subject to division of the assets and liabilities of Andhra Pradesh Gramin Vikas Bank with Telangana Gramin Bank.

The Centre had initiated the consolidation of RRBs in 2004-05. This resulted in a reduction in the number of such banks from 196 to 43 by 2020-21 through a three-phase merger. Let us tell you that the Center currently has 50 percent stake in RRB. Even after the merger, the share of central and sponsor public sector banks in RRBs will not be less than 51 per cent.