The central government is planning to merge two rural banks in Bihar: North Bihar Gramin Bank and South Bihar Gramin Bank. This announcement is expected before March 2025, as part of efforts to restructure banks. The Union Finance Ministry is currently making preparations for this change.
Both banks together provide essential banking services to over 39,000 villages across Bihar. Once merged, they will operate as a single rural bank at the state level, making it easier for people in rural areas to access banking services.
This merger follows the previous integration of Central Bihar Gramin Bank and Bihar Gramin Bank, which created South Bihar Gramin Bank on January 1, 2019. South Bihar Gramin Bank is now the largest rural bank in India, with its headquarters in Patna. North Bihar Gramin Bank is based in Muzaffarpur. The new name and headquarters for the merged bank have not yet been decided.
By joining forces, the two banks will expand their reach across the entire state of Bihar. This merger is expected to improve the efficiency of the bank and speed up the implementation of various government schemes at the panchayat level. It will help deliver direct benefits to local communities and make it easier for people to get loans for employment.
The merger will help manage rural banking better across Bihar, improving business and the bank’s credit-deposit ratio. Since about 85% of Bihar’s population lives in rural areas, this merger is seen as a positive step for the rural economy.
Currently, North Bihar Gramin Bank operates 1,027 branches, while South Bihar Gramin Bank has 1,078 branches. North Bihar Gramin Bank has 2.5 crore account holders, whereas South Bihar Gramin Bank has 3 crore. While North Bihar Gramin Bank is making a profit, South Bihar Gramin Bank has faced a loss of ₹918 crore. The loan disbursement figures show North Bihar at ₹10,961 crore and South Bihar at ₹8,916 crore, with deposits totaling ₹17,850 crore and ₹23,484 crore, respectively. The net Non-Performing Assets (NPA) ratios are 8.53% for North Bihar and 30.7% for South Bihar.
This merger aims to strengthen banking services for rural customers and enhance financial support in Bihar’s villages.
