The Department of Financial Services (DFS) has notified the amalgamation of 26 Regional Rural banks (RRBs) under the ‘One State One RRB’ policy, the Ministry of Finance said in a statement on Tuesday.

Considering the improvement in efficiency of the RRBs due to amalgamations in the past, the Ministry of Finance rolled out an amalgamation plan in November 2024 for consultation with stakeholders.

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After consultation with stakeholders, amalgamation of 26 RRBs in 10 states and one Union Territory (UT) have been carried out with primary focus on improvement in scale efficiency and cost rationalisation.

Notably, this is the fourth phase of amalgamation of RRBs. In the previous three phases — Phase-I (FY 2006 to FY 2010), Phase-2 (FY 2013 – FY 2015), and Phase-3 (FY 2019 to FY 2021) — the number of RRBs was reduced from 196 to 82, then to 56, and subsequently to 43.

At present, 43 RRBs are functioning in 26 states and 2 UTs. Post amalgamation, there will be 28 RRBs in 26 states and 2 UTs, with more than 22,000 branches covering 700 districts. Their predominant area of operation remains rural areas, with approximately 92% of branches located in rural/semi-urban areas.

The transferee Regional Rural Bank shall have the power to post or appoint the employees in the interest of the bank and the public as a whole anywhere in the entire area of operation of the transferee Regional Rural Bank.

Regional Rural Banks were established in 1975 to develop the rural economy by providing credit and other facilities for the development of agriculture, trade, commerce, industry, and other productive activities in the rural areas, particularly to small and marginal farmers, agricultural labourers, artisans, and small entrepreneurs.