New Delhi
Finance Minister Nirmala Sitharaman on Monday said the number of Regional Rural Banks (RRBs) in India has been reduced from 43 to 28 to simplify management and improve service delivery. This change came into effect from May 1, 2025, across 26 states and 2 union territories.
In a written reply during the first day of the Monsoon Session in Parliament, Sitharaman said the government followed the “One State-One RRB” principle in its Phase IV of amalgamation. The move aims to improve scale efficiency, reduce costs, and strengthen the banks' financial base.
The merged RRBs now have a larger capital base, making them more stable and financially strong. With fewer administrative units, the banks are expected to save costs and run more smoothly. The consolidation also enables better use of technology for faster, more efficient services.
To ensure a smooth merger process, the government has set up state-level monitoring committees and a national project monitoring unit. NABARD has issued a standard operating procedure guiding the entire process. This includes setting up Amalgamation Project Management Units, Steering Committees, and Functional Committees in each RRB to manage policies and integration.
Sitharaman also referred to a 2021 NABARD study showing that earlier mergers led to better financial results. The share of profitable RRBs went up, and overall losses as a share of total assets dropped.
This large-scale restructuring is expected to make RRBs more viable and better equipped to serve India’s rural population effectively.