On Tuesday, the Department of Financial Services (DFS) under the Ministry of Finance announced the merger of 26 Regional Rural Banks (RRBs) as part of the fourth phase of consolidating these banks. The initiative is guided by the “One State, One RRB” approach and is aimed at boosting efficiency and reducing costs. According to an official statement from the Ministry, this decision follows a consultation process with stakeholders that began in November 2024. The merger involves RRBs functioning in 10 states and one union territory.

The Ministry stated that the consolidation is aimed at expanding operational scale and making better use of resources, building on the success of earlier merger phases that had already improved the performance of Regional Rural Banks (RRBs). Before this latest round of restructuring, 43 RRBs were functioning across 26 states and 2 union territories. After the merger, that number has come down to 28. Together, these banks run over 22,000 branches and serve around 700 districts across the nation. Notably, about 92% of these branches are located in rural and semi-urban areas, reinforcing their primary goal of promoting financial inclusion in rural regions.

This is the fourth time the government has carried out a merger of Regional Rural Banks (RRBs). Between 2006 and 2010, the total number of RRBs was brought down from 196 to 82 during the first phase. In the second phase, from 2013 to 2015, the count was reduced further to 56. The third phase, which took place between 2019 and 2021, brought the number down to 43.