The government has asked state-run banks to get ready for the stock market listing of their Regional Rural Banks (RRBs) starting next financial year. This move is aimed at making strong RRBs more independent, transparent and financially stronger.
According to officials quoted by ET, at least two RRBs may enter the stock market in the first half of FY27. One of these is likely to be Uttar Pradesh Gramin Bank. An official said, “Banks have been told to prepare five-year plans for their newly merged RRBs. For profitable RRBs, sponsor banks will help them meet the requirements needed before listing.”
Earlier this year, the government completed a major consolidation under the “One State, One RRB” policy. This reduced the number of RRBs from 48 to 23. After the merger, the finance ministry asked sponsor banks to submit names of RRBs that are strong enough for an IPO (Initial Public Offering).
Financial Services Secretary M. Nagaraju had also instructed banks to upgrade technology in the RRBs and speed up their integration. Officials say that technology systems for almost all RRBs have now been merged, and several banks have shown strong financial performance. That is why the government wants to begin with two listings in early FY27.
How Many RRBs Are Eligible?
Around five to seven RRBs are expected to meet the eligibility rules for listing. Under the 2002 guidelines, an RRB must meet following conditions for listing on stock market:
- Net worth of at least ₹300 crore in each of the last three years
- Operating profit of at least ₹15 crore in three of the last five years
- Minimum 10% return on equity (RoE) in three of the last five years
Currently, ownership of an RRB is divided like this:
- Central Government – 50%
- State Government – 15%
- Sponsor Bank – 35%
Why Listing RRBs Looks Possible Now
Earlier, the finance ministry said that merging RRBs has made them stronger by increasing their capital base. This has improved their financial health and made them more stable. In FY25, RRBs together reported a profit of ₹6,825 crore, slightly lower than ₹7,571 crore in FY24. Minister of State for Finance Pankaj Chaudhary told Parliament that the dip happened because RRBs had to implement a pension scheme with retrospective effect (from 1993) and also pay computer increment dues.
Performance of RRBs
| Sr.No. | Key Financial Parameters | FY 2020-21 | FY 2021-22 | FY 2022-23 | FY 2023-24 | FY 2024-25 | As on 30 September 2025 (Provisional) |
| 1. | Total Deposits(In Rs. Crore) | 5,25,226 | 5,62,538 | 6,08,509 | 6,59,815 | 7,13,800 | 7,20,000 |
| 2. | Loans Outstanding(In Rs. Crore) | 3,34,171 | 3,62,838 | 4,14,368 | 4,71,384 | 5,26,763 | 5,50,509 |
| 3. | Credit-Deposit Ratio(CD ratio) (%) | 63.6 | 64.5 | 68.1 | 71.4 | 73.8 | 76.5 |
| 4. | Gross Non-Performing Asset (GNPA) (%) | 9.4 | 9.1 | 7.2 | 6.1 | 5.4 | 5.8 |
| 5. | Net Non-PerformingAsset (NNPA) (%) | 4.8 | 4.7 | 3.2 | 2.4 | 2.0 | 2.3 |
| 6. | Net Profit(In Rs. Crore) | 1,685 | 3,219 | 4,974 | 7,571 | 6,825 | 6,274 |
| 7. | Net Worth(In Rs. Crore) | 30,476 | 40,177 | 47,451 | 56,780 | 63,927 | 69,184 |
| 8. | Capital to RiskWeighted Assets Ratio (CRAR) (%) | 10.2 | 12.7 | 13.4 | 14.2 | 14.4 | Net Non-Performing Asset (NNPA) (%) |
