Regional Rural Banks Merger: 'One State, One RRB' » 🪵 𝙹𝙷𝙰𝚁𝙺𝙷𝙰𝙽𝙳𝙸 𝙱𝙰𝙱𝙰 🐘

In a major reform under Phase 4 of banking modernisation, the Government of India has merged 26 Regional Rural Banks (RRBs) across 11 states to streamline their functioning and enhance service delivery. Known as the ‘One State, One RRB’ policy, this reform marks a new chapter in rural banking aimed at better efficiency, governance, and financial outreach.

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One State One Regional Rural Banks

The One State One RRB initiative, highlighted in the New India Samachar, represents a crucial restructuring in India’s rural banking sector. From an initial 43 RRBs, the number has now come down to 28, following the latest round of consolidations.

This reform comes as a strategic effort to eliminate redundancies, reduce administrative overheads, and improve accessibility in remote and underbanked regions. The merger was finalised after extensive consultations starting in November 2024, with emphasis on state-level operational harmony.

Key States & Coverage

This phase covered mergers in 11 states, including but not limited to:

Bihar
Gujarat
Karnataka
Madhya Pradesh
Maharashtra
Odisha
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
Chhattisgarh

These mergers have led to better resource pooling and strategic alignment of regional banking infrastructure. With over 22,000 branches now serving in nearly 700 districts, the RRB network is better equipped to serve the rural population.

Summary of Changes & Impact

Core Issue:

This reform is rooted in the goal to rationalise banking operations in the rural sector. Earlier, multiple RRBs operated within the same state, leading to inefficiencies and duplicated efforts. The new policy mandates that each state will now have a single RRB, leading to:

Unified customer service models
Lowered operating costs
Simplified regulatory oversight
Enhanced digital banking infrastructure in rural belts

This initiative aligns with India’s larger vision of digital and financial inclusion, especially under programmes like Jan Dhan Yojana and Digital India.