Notification on ‘One State, One RRB’ Likely Next Week, Says M. Nagaraju
The Indian Government is set to announce the “One State, One Regional Rural Bank (RRB)” policy next week, according to M. Nagaraju, Secretary of the Department of Financial Services.
This plan aims to merge multiple RRBs in each state into a single entity to improve efficiency and reduce competition among sponsor banks.
Currently, India has 43 RRBs, but the government plans to consolidate them into around 28, with one RRB per state.
The selection of the sponsor bank will be based on performance.
This restructuring is expected to enhance banking services in rural areas, focusing on better technology and financial stability.
The government is working closely with state governments, the Reserve Bank of India (RBI), and NABARD to implement this change.
The final decision is expected soon, with completion targeted by the end of the 2024-25 financial year.
The “One State, One RRB” plan is a big idea to combine small banks called Regional Rural Banks (RRBs) in each state into one single bank.
This will make things simpler and help these banks work better to serve people in rural areas.
States Leading the Way
Five states—Bihar, Odisha, Karnataka, Andhra Pradesh, and Rajasthan—are working quickly to make this happen.
These states are following instructions from the Department of Financial Services (DFS).
The new, combined banks are expected to start working by January 2025.
Why Are State Governments Important?
The law for RRBs, made in 1976, gives state governments a 15% ownership in these banks.
This means they are important partners in this process and need to agree for the changes to happen.
What the Experts Say
Venkateshwar Reddy, the leader of an RRB workers’ group called AIRRBEA, said that the process is moving fast in these five states.
He also mentioned that the DFS is talking to other banks and asking for ideas to make this plan successful.
Challenges Along the Way
Some people are not happy with this change.
For example, in Gujarat, a group of bank employees said their chairman was trying to stop the process.
This shows that while the plan is big and important, not everyone agrees on how to do it.
Why is This Important?
The “One State, One RRB” plan will help rural areas by making banks stronger and better at helping people.
