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Amalgamation of RRBs: 25 merged into 10 in nine months

Jan 20 2013, 13:42 IST
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SummaryAs part of consolidation in the Regional Rural Banks (RRBs) segment, 25 such entities have been merged into 10 during the first nine months of the current fiscal.

As part of consolidation in the Regional Rural Banks (RRBs) segment, 25 such entities have been merged into 10 during the first nine months of the current fiscal.

"Restructuring of RRBs by amalgamating geographically contiguous RRBs sponsored by different banks within a state is in progress," an official said.

Up to January 7, 25 RRBs have been amalgamated into 10 RRBs in seven states. As a result, the number of RRBs has reduced from 82 as on April 2012 to 67 in the first week of January, the official said.

The consolidation is aimed at improving efficiencies and helping RRBs achieve scale. The amalgamation will also help in optimising the use of modern technology.

"Post amalgamation, there has been no disruption in delivery of services by the RRBs and merged entities have been discharging their functions properly," the official added.

States were the mergers took place are Bihar, Karnataka, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and Uttarakhand.

RRBs have a network of about 16,000 branches spread across the rural and semi-urban centres of the country.

Consolidation of RRBs has been going on in a phased manner since 2005. The number of RRBs came down to 133 in 2006 from 196 at the end of March 2005. It further came down to 105 and subsequently to 82 at the end of March 2012.

As on March 2012, of the total RRBs, 79 were profit- making while the remaining three had registered losses.

In order to boost the capital base of RRBs, the government on the recommendation of a panel headed by RBI Deputy Governor K C Chakrabarty decided to recapitalise 40

selected RRBs in 21 states.

The Centre holds 50 per cent stake in RRBs, while 35 per cent and 15 per cent are with the sponsor banks and state governments, respectively.

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