Regional Rural Banks (RRBs) are more likely to see a fourth spherical of amalgamation, with the variety of these Banks more likely to come down from 43 to twenty-eight by way of consolidation.
The proposed transfer is a part of the Authorities’s ‘One State-One RRB’ objective.
As a part of the amalgamation train, 27 RRBs unfold throughout 12 states could also be consolidated into 12 RRBs, going by the State-wise checklist of RRBs proposed for amalgamation drawn up by the finance ministry.
The ministry has sought feedback from the chiefs of sponsor banks of RRBs.
RRBs had been established in 1975 beneath the provisions of an Ordinance promulgated on twenty sixth September 1975 and adopted by Regional Rural Banks Act, 1976, with a view to develop the agricultural financial system and create a supplementary channel to the ‘Cooperative Credit score Construction’.
They had been floated to enlarge institutional credit score for the agricultural and agriculture sector
The contribution of the Authorities of India, the involved State Authorities and the financial institution (normally a public sector financial institution), which has sponsored the RRB, to the share capital of RRBs is within the proportion of fifty per cent, 15 per cent and 35 per cent, respectively
Amongst states/ union territories that can see consolidation of RRBs embrace Andhra Pradesh, which has the utmost variety of RRBs (4), Uttar Pradesh and West Bengal (3 every), and Bihar, Gujarat, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha and Rajasthan (2 every).
Within the case of Telangana, the amalgamation/ merger of RRBs can be topic to bifiurcation of belongings and liabilities of Andhra Pradesh Grameena Vikas Financial institution (APGVB) between APGVB and Telangana Grameena Financial institution.
With a view to allow RRBs to reduce their overhead bills, optimize using expertise, improve the capital base and space of operation and improve their publicity, the Govemment initiated structural consolidation of RRBs in 2004-05. This resulted in discount within the variety of RRBs from 196 to 43 until 2020-21 by way of 3 phases of amalgamation.
As per the guiding ideas for the proposed amalgamation, the RRB with the biggest enterprise (deposits plus advances) among the many amalgamating RRBs in a state can be the transferee RRB in that state.
Additional, the sponsor financial institution of the transferee RRB, which has the biggest enterprise quantity and department community amongst all of the amalgamating RRBs, would turn out to be the sponsor financial institution of the amalgamated RRB.
A typical syntax
As at March-end 2023, RRBs had 21,995 branches, 30.6 crore deposit accounts and a couple of.9 crore mortgage accounts in 26 States and three Union Territories (Puducherry, Jammu and Kashmir and Ladakh), per RBI information.
The 43 RRBs collectively had deposits, advances (internet) and investments aggregating ₹6,08,509 crore, ₹3,86,951 crore and ₹3,13,401 crore, respectively.
