Ministry of Finance Announces Implementation of 'One State, One RRB' Policy from May 1, 2025.
Banking & Finance
In April 2025, the Department of Financial Services (DFS), Ministry of Finance (MoF), announced the implementation of the 'One State-One Regional Rural Bank (RRB)' policy through an official notification.
- This initiative involves the amalgamation of 26 RRBs across 11 regions (10 States and 1 Union Territory), with effect from May 1, 2025. States affected include Andhra Pradesh (AP) with the highest number of RRBs (4), followed by Uttar Pradesh (UP) and West Bengal (WB) (3 each), and Bihar, Gujarat, Jammu & Kashmir (J&K), Karnataka, Madhya Pradesh (MP), Maharashtra, Odisha, and Rajasthan (2 each).
- The merger is executed under Section 23A (1) of the RRB Act, 1976, and marks the 4th round of RRB consolidation, reducing the number of RRBs from 43 to 28 across India.
Main Point :- (i) As per the notification, each newly formed RRB will inherit the properties, powers, rights, obligations, and duties of the previously existing banks.
(ii) The goal of this consolidation is to enhance the operational efficiency of RRBs, avoid overlapping functions, and reduce competition among Public Sector Banks (PSBs) that sponsor them.
(iii) The ongoing consolidation process of RRBs began in 2005, following the recommendations of the Dr. Vyas Committee.
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