The Ministry of Finance announced on Monday that from May 1, 2025, it is launching the scheme of one state, one regional rural bank (RRB). Under the policy, all regional rural banks will be amalgamated into a single regional rural bank.
In a statement, the Ministry of Finance, said, “Whereas the Central Government, after consultation with the National Bank for Agriculture and Rural Development, the Government of Andhra Pradesh and the Union Bank of India, Canara Bank, Indian Bank and State Bank of India, being the sponsor banks of Chaitanya Godavari Grameena Bank, Andhra Pragathi Grameena Bank, Saptagiri Grameena Bank and Andhra Pradesh Grameena Vikas Bank, is of the opinion that it is necessary in the public interest and in the interest of the development of the area served by the aforesaid Regional Rural Banks and also in the interest of the said Regional Rural Banks themselves, that the said Regional Rural Banks shall beamalgamated into a single Regional Rural Bank.”
The statement further said, “The Central Government hereby provides for the amalgamation of the said Regional Rural Banks into a single Regional Rural Bank, which shall come into effect on and from the 1st day of May, 2025 (hereinafter referred to as the effective date of amalgamation) with such constitution, property, powers, rights, interests, authorities and privileges; and with such liabilities, duties and obligation.”
From the effective date of amalgamation, the transferor Regional Rural Banks that is Chaitanya Godavari Grameena Bank, Andhra Pragathi Grameena Bank, Saptagiri Grameena Bank and Andhra Pradesh Grameena Vikas Bank in the State of Andhra Pradesh shall cease to carry on the business including that of making any payment to any depositors or discharge any liability or obligation to the creditors except to the extent as may be necessary for implementation of the provisions of the amalgamation of this notification, said the ministry.
“This large-scale consolidation aims to streamline operations, strengthen the financial resilience of Regional Rural Banks (RRBs), and enhance their capacity to serve rural communities more efficiently. Each newly formed RRB will be supported by a leading public sector bank as its sponsor, ensuring greater financial stability and operational effectiveness, this will help in providing more efficient services in rural areas,” said Shikhar Aggarwal, Chairman, BLS E-Services.
