Lok Sabha Question No. 2668 (UNSTARRED), answered on 2026-03-09
Subject: One State, One Rural Bank
Ministry: FINANCE
Asked by: Dr. Manna Lal Rawat

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO. 2668

## ANSWERED ON MONDAY, MARCH 9, 2026/ 18 PHALGUNA, 1947 (SAKA)

## One State, One Rural Bank

## † 2668. DR. MANNA LAL RAWAT:

Will the Minister of FINANCE be pleased to state:

(a) whether the Government has decided to implement the policy of 'One State, One Rural Bank' , if so, the salient objectives and provisions thereof;

(b) the names of the States where the merger of rural banks has been done so far under the said policy and the names of the States for which the merger process is under progress;

(c) the details of impact of the said integration on banking services, credit delivery, financial inclusion and employment in rural areas;

(d) whether some States or rural banks have raised any objections to the said policy and if so, the details thereof; and

(e) the status of 'One State, One Rural Bank' policy in Rajasthan?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI PANKAJ CHAUDHARY)

(a)  &  (b)  Guided  by  the  principle  of  'One  State-One  RRB  (Regional  Rural  Bank)',  the Government has, as per the powers conferred under Section 23A of the Reginal Rural Banks Act,  1976,  and  in  consultation  with  State  Governments,  NABARD  and  Sponsor  Banks, amalgamated  RRBs  in  12  States/UTs,  to  achieve  the  benefits  of  scale  efficiency,  costrationalisation,  strengthen  capital  and  technology  adoption  and  improve  visibility  and branding. As a result of the amalgamation process, the total number of RRBs in the country has been reduced from 43 to 28.

The amalgamation on the principle of 'One State, One RRB' was done in 12 States/UTs i.e. Andhra  Pradesh,  Bihar,  Gujarat,  Jammu  and  Kashmir,  Karnataka,  Madhya  Pradesh, Maharashtra, Odisha, Rajasthan, Telangana, Uttar Pradesh and West Bengal. The amalgamation of the RRBs has been accordingly completed in all 12 States by 01.05.2025.

(c)   The amalgamation of Regional Rural Banks (RRBs), undertaken on the principle of 'One State-One RRB', is expected to yield multiple benefits for RRBs that positively impact their banking services, credit delivery, financial inclusion, and overall operational efficiency in rural areas. The key advantages include:

i. Better Capital Base and Access to Resources: The amalgamation of 2 or more smaller RRBs in a particular State/UT is expected to increase their capital base enhancing the financial stability and resilience of the merged entity. This stronger capital position can enable the RRB to absorb potential losses and weather economic downturns more effectively.

ii. Enhanced financial inclusion: The consolidation expands the ability of RRBs to deliver uniform banking services, deploy digital infrastructure, and ensure seamless credit delivery across  the  State.  With  larger  capital  base,  better  technology,  and  contiguous  areas  of operation, the amalgamated RRBs are positioned to deepen financial inclusion by reaching more rural households, small farmers, artisans, micro entrepreneurs.

iii.  Employment  Continuity: All  employees  of  the  erstwhile  RRBs  are  retained  in  the transferee RRB with continuity of service. The unified structure enables better manpower planning, skill utilisation, and redeployment across the enlarged service area.

iv.  Reduced  Overheads: By  consolidating  operations  and  eliminating  redundancies  on account  of  separate  administrative  structures,  amalgamation  is  expected  to  lead  to  cost savings.

v.  Improved  Technology  Adoption: Amalgamated  RRBs  can  invest  in  and  leverage advanced  technology  platforms,  leading  to  improved  operational  efficiency  and  customer service.

(d) Section 23A of Regional Rural Banks (RRBs) Act, 1976 provides for amalgamation of RRBs,  after  consultation  with  the  NABARD,  the  concerned  State  Government  and  the Sponsor Bank. Accordingly, consultation with concerned State Governments were held for amalgamation of RRBs. State of Karnataka had opined that amalgamation of 2 RRBs in the state of Karnataka may be explored, if felt essential, after erstwhile Karnataka Gramin Bank becomes a profit making RRB.

(e)    In  the  state  of  Rajasthan,  Baroda  Rajasthan  Kshetriya  Gramin  Bank  and  Rajasthan Marudhara Gramin Bank have been amalgamated to form Rajasthan Gramin Bank (RGB). The amalgamated entity is operating since 1st May 2025 in the state.

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