One State, One RRB Policy

Current Context: The Ministry of Finance has notified the amalgamation of 26 Regional Rural Banks (RRBs) across 10 states and 1 union territory, effective May 1, 2025, reducing the number of RRBs to 28.

About

• Initiative by: Department of Financial Services
• Origin: Based on Vyas Committee (2005) recommendations
• Aim: Consolidate all RRBs within a state into a single RRB

Objectives:

• Improve operational efficiency and governance
• Rationalize costs, optimize human and technological resources
• Eliminate inter-sponsor bank competition within a state

About Regional Rural Banks (RRBs)

• Established: 1975 under the Regional Rural Banks Act, 1976
• Based on: Narasimham Committee Report (1975)
• Purpose: Bridge rural credit gaps and support institutional rural lending
• Regulated by: Reserve Bank of India (RBI)
• Supervised by: National Bank for Agriculture and Rural Development (NABARD)
• Ownership Structure:Government of India – 50%,State Government – 15%&Sponsor Bank – 35%