With the implementation of the Center's "One State One RRB" policy on May 1, 2025, the nation's Regional Rural Bank (RRB) network will undergo a substantial restructuring. 26 RRBs from 11 states and one Union Territory have been combined, bringing the overall number of RRBs down from 43 to 28, according to a Finance Ministry notification. 

The goal of this move is to improve the operational efficiency, financial stability, and regional focus of Regional Rural Banks (RRBs). The new structure will bring together over 22,000 branches from 28 RRBs, covering nearly 700 districts. About 92% of these branches will be in rural and semi-urban areas, staying true to the original purpose of RRBs: to promote financial inclusion in rural India. This merger is being carried out under Section 23A (1) of the Regional Rural Banks Act, 1976, which allows such mergers in the public interest and for the development of the regions they serve. “Now there will be 28 RRBs with over 22,000 branches spanning across 700 districts,” the DFS said in a post on X today. All restructured Regional Rural Banks (RRBs) will now have an authorised capital of ₹2,000 crore, which will strengthen their ability to provide credit and support the economy in their respective states. 

This change is part of the fourth major phase of consolidating RRBs. Earlier phases, which took place between 2006 and 2021, reduced the number of RRBs from 196 to 43. This current phase builds on the successful results of previous mergers, such as lower costs and improved operations on a larger scale. In Andhra Pradesh, four regional rural banks (RRBs) – Chaitanya Godavari Grameena Bank, Andhra Pradesh Grameena Vikas Bank, and two others – have come together to form a single bank, called Andhra Pradesh Grameena Bank. This new bank is based in Amaravati and is sponsored by the Union Bank of India. In Uttar Pradesh, three RRBs – Baroda UP Bank, Aryavart Bank, and Prathama UP Gramin Bank – have merged into a unified bank named Uttar Pradesh Gramin Bank. This bank is headquartered in Lucknow and is sponsored by Bank of Baroda. In West Bengal, three RRBs have merged to create the West Bengal Gramin Bank. This new bank is supported by Punjab National Bank, with UCO Bank and Central Bank of India also playing a role in the earlier institutions. 

Similar mergers of two banks have occurred in various states like Bihar, Gujarat, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha and Rajasthan. For example, Baroda Gujarat Gramin Bank and Saurashtra Gramin Bank have merged to form Gujarat Gramin Bank, which is based in Vadodara and supported by the Bank of Baroda. In Jammu & Kashmir, J&K Grameen Bank and Ellaquai Dehati Bank have combined to create a single regional rural bank (RRB) under the support of J&K Bank.