DFS Reviews RRBs Amalgamation Progress, Directs Sponsor Banks to Ensure Timeline Adherence
RRBs posted ₹7,148 crore profit in FY25 with GNPA at decade-low 5.3%. With 22K+ branches, they remain key to rural financial inclusion.
Author: Saurav Kumar
Published: May 6, 2025
In a high-level review meeting held in Mumbai on May 5, 2025, Secretary of the Department of Financial Services (DFS), Sh. M. Nagaraju, assessed the performance and amalgamation progress of Regional Rural Banks (RRBs). The meeting witnessed the participation of officials from DFS, NABARD, SIDBI, RBI, sponsor banks, and chairpersons of all RRBs.
The review focused on the ongoing “One State One RRB” amalgamation process, RRBs' role in rural credit delivery, and measures required for long-term operational resilience.
RRBs Record Performance
The consolidated business of all RRBs reached ₹12.40 lakh crore as of March 2025. With over 22,000 branches across 700 districts—92% of them in rural and semi-urban areas—RRBs continue to serve as a backbone of India’s financial inclusion efforts. In a notable achievement, RRBs posted a net profit of ₹7,148 crore in FY 2024–25, while Gross Non-Performing Assets (GNPA) declined to 5.3%, the lowest level in a decade.
Directions to Sponsor Banks on Amalgamation and Tech Integration
Secretary Nagaraju emphasised that the sponsor banks should facilitate technology upgradation in RRBs and complete integration process adhering to the strict timeline by September 30, 2025. He directed them to guide RRBs on technology integration, address emerging HR issues, and create a roadmap for the next five years to ensure a level playing field and sustainable growth.
“With the implementation of One State One RRB, sponsor banks must offer strong leadership to harmonize operations, drive tech upgradation, and help rural banks stay competitive,” he noted.
Sponsor banks were asked to recognize upcoming challenges and work closely with RRBs in resolving post-amalgamation gaps—especially in human resource management and operational systems.
Focus on Credit to Agriculture and MSMEs
Reiterating the policy vision behind the amalgamation, the DFS Secretary urged RRBs to boost credit flows to priority sectors such as agriculture, allied activities, MSMEs, and government schemes. This, he stressed, would ensure rural banks continue to be a pillar of inclusive economic growth.
This meeting marks a crucial checkpoint in the government's efforts to modernize and strengthen rural banking through structural reforms, while ensuring that the needs of rural populations remain at the core of RRB operations.
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