New Delhi, April 9, 2025:
In a major move to improve banking services in rural areas, the Department of Financial Services under the Ministry of Finance has approved the merger of 15 Regional Rural Banks (RRBs) across India. This merger will come into effect from May 1, 2025.
Bank
What’s the background of this decision?
The Government of India has been working on the “One State – One RRB” model to simplify and strengthen rural banking. The key aims of this policy are:
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To increase efficiency in banking operations
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To reduce administrative costs
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To improve and expand services in rural areas
This is considered the 4th phase of the RRB consolidation plan. In earlier phases, the number of RRBs was reduced from 196 to 43. After this new merger, the total will come down further to 28.
Which states are affected?
This latest phase of the merger will take place in 11 states, including:
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Andhra Pradesh
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Uttar Pradesh
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West Bengal
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Bihar
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Gujarat
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Jammu & Kashmir
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Karnataka
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Madhya Pradesh
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Maharashtra
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Odisha
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Rajasthan
Notably, Uttar Pradesh and West Bengal will each see three RRBs merged into one.
What are the main goals of this merger?
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Improve operational efficiency by reducing duplication and making management easier.
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Cut down costs through better resource utilization.
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Support rural economic stability by creating stronger, more capable banks.
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Boost financial inclusion by bringing modern banking services to more villages.
Will rural people benefit?
Yes. The merger is expected to help people in rural areas get:
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Better and faster services
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Access to modern digital banking tools
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Easier access to loans, especially for small farmers and entrepreneurs
