On May 6, Finance Minister Nirmala Sitharaman is set to review the progress of the ‘One State-One RRB’ policy, which aims to improve the efficiency and cost-effectiveness of regional rural banks (RRBs). The policy, which consolidates RRBs, will officially come into effect on May 1.
What is the ‘One State-One RRB’ Policy?
The ‘One State-One RRB’ policy is designed to merge the existing regional rural banks (RRBs) into a single entity for each state. This consolidation will help streamline operations, reduce costs, and make the banks more efficient. As part of this initiative, 15 RRBs across 11 states will merge, reducing the total number of RRBs from 43 to 28.
The States and RRBs Affected
The consolidation will take place in 11 states: Andhra Pradesh, Uttar Pradesh, West Bengal, Bihar, Gujarat, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha, and Rajasthan. Each state will merge its RRBs into one, under the goal of having a single RRB per state.
Andhra Pradesh: In Andhra Pradesh, four RRBs will merge into a single entity, Andhra Pradesh Grameena Bank. The RRBs involved are:
- Chaitanya Godavari Grameena Bank (sponsored by Union Bank of India)
- Andhra Pragathi Grameena Bank (sponsored by Canara Bank)
- Saptagiri Grameena Bank (sponsored by Indian Bank)
- Andhra Pradesh Grameena Vikas Bank (sponsored by State Bank of India)
Uttar Pradesh: In Uttar Pradesh, three RRBs will merge into Uttar Pradesh Gramin Bank, with its head office located in Lucknow. The RRBs involved are:
- Baroda UP Bank (sponsored by Bank of Baroda)
- Aryavart Bank (sponsored by Bank of India)
- Prathama UP Gramin Bank (sponsored by Punjab National Bank)
West Bengal: In West Bengal, three RRBs will merge into West Bengal Gramin Bank, headquartered in Kolkata. The RRBs involved are:
- Bangiya Gramin Vikash Bank (sponsored by Punjab National Bank)
- Paschim Banga Gramin Bank (sponsored by UCO Bank)
- Uttarbanga Kshetriya Gramin Bank (sponsored by Central Bank of India)
Other States: In the remaining states, two RRBs will merge into a single RRB. These states include Bihar, Gujarat, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha, and Rajasthan.
Why is This Important?
The goal of the ‘One State-One RRB’ initiative is to increase operational efficiency and reduce costs for RRBs. By consolidating the banks, the government hopes to strengthen these institutions, enabling them to provide better services to rural areas. Finance Minister Nirmala Sitharaman will hold a meeting with the heads of the affected RRBs to discuss the progress of this policy and address any challenges related to the consolidation.
