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DFS Orders Bifurcation of Andhra Pradesh Grameena Vikas Bank
The Department of Financial Services has ordered the bifurcation of Andhra Pradesh Grameena Vikas Bank between Andhra Pradesh and Telangana. This historic move aligns with the One State-One RRB initiative.
Author: Saurav Kumar
Published: November 20, 2024
The Department of Financial Services (DFS) has ordered the bifurcation of the assets and liabilities of Andhra Pradesh Grameena Vikas Bank (APGVB) between two states of Andhra Pradesh and Telangana. The timing of bifurcation coincides with the amalgamation of Regional Rural Banks (RRBs) under the One State - One RRB plan.
In a letter dated, November 13, 2024, DFS ordered NABARD with the following recommendations:
- The assets and liabilities of APGVB will be bifurcated between the two states as per the audited financial position as on 31st March 2024 on the basis of the Working Group recommendations.
- The effective date of bi-furcation shall be taken as 01.01.2025.
- Post bifurcation, the special audit shall be carried out for both banks to confirm that the balance sheet position wrt components of assets and liabilities remains mostly the same as per the audited financial position, as was on 31-03-2024.
- The assets and liabilities of APGVB Headquarters shall be apportioned between the two states on the basis of population ratio.
Bifurcation - A Delayed Process
According to Kranthi Kumar Makkad, President, Andhra Pradesh Grameena Vikas Bank Officers Association (APGVBOA), “Bifurcation of APGVB was to happen in 2014 itself due to bifurcation of United Andhra Pradesh into Andhra Pradesh and Telangana, and a notification was issued in October 2014. However, due to disagreement between both the state governments it could not materialise till the recent past. Moreover at present the state governments of AP and Telangana have established an agreement and the bifurcation is going to coincide with the One State One RRB plan. So bifurcation of APGVB has become mandatory.”
APGVB’s Uniqueness
APGVB is going to become the stand alone gramin bank in the history of India’s rural banking to undergo bifurcation. It was formed after amalgamation of 5 RRBs sponsored by SBI in the United Andhra Pradesh on 01.04.2006.
Kranthi Kumar told Kanal, “APGVB within a short period of its existence, became one of the top performing RRBs in the country and is recording the highest profits in the country among all RRBs. With 3500 employees, 771 branches, 14 regional offices and business of more than 60000 crores, it is the fastest growing RRB and has earned several awards from Government of India and other agencies in respect of financial inclusion and technology upgradation.”
He also added that, “Allotment of staff members between both the parts of APGVB is the main issue now and the Officers Association and Employees' union have submitted a representation to the DFS to give options to all the employees to opt between both the states and accept all the opinion allotting the staff to the respective state for a smooth completion of the bifurcation.”