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There is an important news related to Regional Rural Banks (Grameen Banks). Is the Government planning to privatise Grameen Banks? The employees are worried about this and have clearly announced strike in case of Privatisation or decrease of stake by Government of India. Let’s understand this issue.
The central government currently owns 50% of the shares in Regional Rural Banks (RRBs). Now, the government is planning to sell 34% of its 50% stake through an Initial Public Offering (IPO).
IPO means shares of the bank will be offered to the public through the stock market. This will be the first time in the history that stake in Grameen Banks will be sold through IPO. To start this process, the government has asked the sponsor banks to select one rural bank for the IPO. This could be a trial step, and later more rural banks may be listed.
At the same time, the government is also considering selling 15% of the shares held by state governments in these rural banks. If this happens, a large portion of the ownership of rural banks will go into private hands through the stock market.
This has raised strong concerns among rural bank employees and officers. They fear that the move could lead to privatization, loss of job security, and changes in the bank’s rural development focus.
In response, the All India Gramin Bank Officers Association and the All India Gramin Bank Employees Association have come together and issued a strike notice. The strike is planned for July 9, and the notice has been sent to all 28 regional rural banks and NABARD (National Bank for Agriculture and Rural Development).
The government is planning to bring at least five Regional Rural Banks (RRBs) to the stock market by the end of the financial year 2026–27. Recently, all the Grameen Banks within a state were merged under the “One State, One RRB” policy [Download Merger PDF].
The government wants to improve the image and trustworthiness of RRBs among investors and the public. By bringing well-performing RRBs to the market, it hopes to attract more capital, improve transparency, and make these banks more competitive.
Recently, the DFS had also released the letter related to raising resources from Capital Market by Regional Rural Banks. Sponsor banks have been asked to submit the name of eligible RRBs for launching of IPOs latest by 29.05.2025. Only the RRBs that fulfill following conditions will be listed on stock exchanges. The DFS has mentioned this eligibility in its letter.
- (i) Net worth to be at least Rs 300 crore in each of the preceding 3 years
- (ii) CRAR to be above regulatory requirement in each of the preceding 3 years
- (iii) Pre-tax operating profit of minimum Rs. 15 crores in 3 out of previous 5 years
- (iv) Return on Equity (RoE) – Minimum 10% in 3 out of previous 5 years
- (v) Return on Assets (RoA) – Minimum 0.5% in 3 out of previous 5 years
- (vi) No accumulated loss
- (vii) RRBs should not be under Prompt Corrective Action by RBI/NABARD
- (viii) Compliance with statutory norms
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