Page 31 - Banking Finance July 2025

ARTICLE

State/ Union Number of RRBs Present number Name of RRB
Territory before amalgamation of RRBs
Puducherry 01 01 Puduvai Bharathiyar Grama Bank
Punjab 01 01 Punjab Gramin Bank
Rajasthan 02 01 Rajasthan Gramin Bank
Tamil Nadu 01 01 Tamil Nadu Grama Bank
Telangana 01 01 Telangana Grameena Bank
Tripura 01 01 Tripura Gramin Bank
Uttar Pradesh 03 01 Uttar Pradesh Gramin Bank
Uttarakhand 01 01 Uttarakhand Gramin Bank
West Bengal 03 01 West Bengal Gramin Bank
Total 43 28

Source: Self-prepared (Data taken from Annual Report, RBI and Department of Financial Services, Govt. of India)

The newly named Regional Rural Banks are designed to (iv) Performance analysis of RRBs: There are 43 RRBs in
foster strong customer trust. People of these states will feel our country. Key performance indicators of RRBs are
a strong emotional relationship with the name of their state. presented below:
The new name carries the states identity. It breaks the re- Table: 2 Comparative Positions of Key
gional identity, for example in West Bengal three RRBs
namely Uttar Banga Kshetriya Gramin Bank, West Bengal Performance Indicators of RRBs
Gramin Bank and Bangiya Gramin Vikash Bank have been (Amount in Rs. Crore)
merged and named West Bengal Gramin Bank.
Particulars As on As on As on
Challenges of Implementation: 31 March 31 March 31 March
2021 2022 2023
(i) Ownership: The ownership of RRBs is shared among
No. of RRBs 43 43 43
the Government of India (50%), the concerned State
Government (15%), and the sponsor Bank (35%). For Number of 21,856 21,892 21,995
managing RRBs there are two regulatory authorities Branch
namely RBI and NABARD. As there are three owners No. of RRBs 30 34 37
and two regulatory authorities so it creates adminis- earning profit
trative complication and slow decision making process
in managing RRBs , leading to inefficiencies in RRB Amount of profit 3,550 4,116 6,178
management. No. of RRBs 13 9 6
incurring losses
(ii) Regional considerations: The reduction in RRBs under
OS-RR makes economic sense, but consolidation must Amount of losses 1,867 897 1,205
consider each state's unique economy, culture, demog- Net profit of RRBs 1,682 3,219 4,974
raphy, geography and needs of people of the concerned
No. of RRBs with 17 16 15
state otherwise the amalgamation will not be effective.
accumulated
(iii) Cost optimization: Cost optimization is important, but losses
it depends on whether each RRB can handle the com-
Accumulated 8,264 9,062 9,841
bined branches and staff from the mergers. Despite the
losses
consolidation, RRBs still face high operational costs. As
more RRBs means more operating costs. Source: Department of Financial Services, Govt. of India

28 | 2025 | JULY | BANKING FINANCE