RRB Amalgamation Reduces Numbers to 28, Boosts Viability

22 Jul 2025 CW Team

To improve the operational viability of Regional Rural Banks (RRBs) and harness economies of scale, the Government of India initiated structural consolidation of RRBs in the financial year 2005-06.

During Phase I (2005-10), the number of RRBs was reduced from 196 to 82 by amalgamating RRBs sponsored by the same bank within a state. Phase II (2012-14) further reduced the number from 82 to 56 by amalgamating RRBs across different sponsor banks operating in geographically contiguous areas within a state. Phase III began in 2019, focusing on merging weaker RRBs with stronger ones, bringing the total number down from 56 to 43 by March 2021.

A 2021 NABARD study on the financial impact of these amalgamations showed improved viability and financial performance for RRBs. The Reserve Bank of India (RBI) published these findings in its Report on Trend and Progress of Banking in India (2020-21). The study revealed a continuous rise in the share of profitable and sustainable RRBs and a reduction in accumulated losses as a percentage of total assets. Improved profitability, coupled with capital infusion in weaker banks, boosted leverage and reserves-to-capital ratios.

Guided by the principle of ‘One State-One RRB’, the government has proceeded with Phase IV amalgamation to achieve scale efficiencies and cost rationalisation. As of 1 May 2025, the number of RRBs has been further reduced from 43 to 28 across 26 states and two union territories, as per the government notification dated 5 April 2025.

This consolidation has resulted in state-level RRBs with contiguous operational areas, simplifying management and improving service delivery. The merged entities have strengthened capital bases, enhancing financial stability and resilience. By eliminating administrative redundancies, amalgamation is expected to generate cost savings. Additionally, these consolidated banks can invest in advanced technology platforms, boosting operational efficiency and customer service.

The amalgamation was implemented based on audited financials as of 30 April 2025, with effect from 1 May 2025. The government has established a State Level Monitoring Committee (SLMC) and a National Level Project Monitoring Unit (NLPMU) to oversee the process.

NABARD has issued a National Level Standard Operating Procedure (SOP), providing detailed guidelines for the formation of Amalgamation Project Management Units (APMU), Steering Committees, and Functional Committees in each Anchor/Transferee RRB. These bodies finalise harmonised policies and manage day-to-day integration.

The government notification also ensures protection of existing employees’ remuneration and service conditions. Inter-se seniority of officers and staff follows NABARD’s SOP. To safeguard rural customers’ interests, NLPMU has directed RRBs to widely publicise the amalgamation through electronic and print media, SMS alerts, and branch-level awareness meetings. RRBs are also required to establish call centres to address customer grievances. According to NABARD, all branches remain operational under the new entities, with migration of customer accounts, deposits, and loans progressing without major disruptions.

This information was provided by Union Finance Minister Smt Nirmala Sitharaman in a written reply to a question in the Lok Sabha today.

To improve the operational viability of Regional Rural Banks (RRBs) and harness economies of scale, the Government of India initiated structural consolidation of RRBs in the financial year 2005-06.During Phase I (2005-10), the number of RRBs was reduced from 196 to 82 by amalgamating RRBs sponsored by the same bank within a state. Phase II (2012-14) further reduced the number from 82 to 56 by amalgamating RRBs across different sponsor banks operating in geographically contiguous areas within a state. Phase III began in 2019, focusing on merging weaker RRBs with stronger ones, bringing the total number down from 56 to 43 by March 2021.A 2021 NABARD study on the financial impact of these amalgamations showed improved viability and financial performance for RRBs. The Reserve Bank of India (RBI) published these findings in its Report on Trend and Progress of Banking in India (2020-21). The study revealed a continuous rise in the share of profitable and sustainable RRBs and a reduction in accumulated losses as a percentage of total assets. Improved profitability, coupled with capital infusion in weaker banks, boosted leverage and reserves-to-capital ratios.Guided by the principle of ‘One State-One RRB’, the government has proceeded with Phase IV amalgamation to achieve scale efficiencies and cost rationalisation. As of 1 May 2025, the number of RRBs has been further reduced from 43 to 28 across 26 states and two union territories, as per the government notification dated 5 April 2025.This consolidation has resulted in state-level RRBs with contiguous operational areas, simplifying management and improving service delivery. The merged entities have strengthened capital bases, enhancing financial stability and resilience. By eliminating administrative redundancies, amalgamation is expected to generate cost savings. Additionally, these consolidated banks can invest in advanced technology platforms, boosting operational efficiency and customer service.The amalgamation was implemented based on audited financials as of 30 April 2025, with effect from 1 May 2025. The government has established a State Level Monitoring Committee (SLMC) and a National Level Project Monitoring Unit (NLPMU) to oversee the process.NABARD has issued a National Level Standard Operating Procedure (SOP), providing detailed guidelines for the formation of Amalgamation Project Management Units (APMU), Steering Committees, and Functional Committees in each Anchor/Transferee RRB. These bodies finalise harmonised policies and manage day-to-day integration.The government notification also ensures protection of existing employees’ remuneration and service conditions. Inter-se seniority of officers and staff follows NABARD’s SOP. To safeguard rural customers’ interests, NLPMU has directed RRBs to widely publicise the amalgamation through electronic and print media, SMS alerts, and branch-level awareness meetings. RRBs are also required to establish call centres to address customer grievances. According to NABARD, all branches remain operational under the new entities, with migration of customer accounts, deposits, and loans progressing without major disruptions.This information was provided by Union Finance Minister Smt Nirmala Sitharaman in a written reply to a question in the Lok Sabha today.

Equipment

12 Dec 2025

Schwing Stetter India Unveils New Innovations at Excon 2025

Schwing Stetter India unveiled more than 20 new machines at Excon 2025, marking one of its most significant showcases and introducing several India-first technologies to the construction equipment sector. The company launched the country’s first 56-metre boom pump designed and manufactured in India, the first fully electric truck mixer, the first CNG mixer variant and the first hybrid boom pump. Executives said the launch portfolio was engineered to support India’s move toward faster, greener and more vertically oriented infrastructure through advanced engineering, clean-energy solutions a..

Infrastructure Energy

12 Dec 2025

SEPC Resolves Hindustan Copper Dispute, Wins Rs 725 Mn Order

Engineering, procurement and construction firm SEPC Ltd has recently settled a dispute with Hindustan Copper Ltd (HCL) and secured a mining infrastructure order valued at Rs 725 million from the state-owned company. SEPC informed the stock exchanges that it has executed a settlement deed with HCL, bringing closure to all inter-se claims and counterclaims arising from arbitration proceedings. As part of the settlement, SEPC will receive Rs 304.5 million as full and final payment, marking the resolution of all pending disputes between the two entities. The company also stated that Hindustan Co..

Infrastructure Energy

12 Dec 2025

20% Ethanol Blending Cuts India’s CO2 Emissions by 73.6 Mn Tonnes

Union Road Transport and Highways Minister Nitin Gadkari recently said that India has reduced carbon dioxide emissions by 73.6 million metric tonnes due to the adoption of 20 per cent ethanol blending in petrol. He made the statement while replying to supplementary questions during the Question Hour in the Lok Sabha. Describing ethanol as a green fuel, the minister said it plays a key role in reducing pollution while also supporting higher incomes for farmers. He underlined that ethanol blending contributes both to environmental sustainability and rural economic growth. Nitin Gadkari also po..