Parliament Question: Review of Performance of Regional Rural Banks (RRBs)

GOVERNMENT OF INDIA MINISTRY OF FINACE DEPARTMENT OF FINANCIAL SERVICES LOK SABHA UNSTARRED QUESTION NO. 4978 ANSWERED ON MONDAY, MARCH 23, 2026/CHAITRA 02, 1948 (SAKA) Review of Performance of Regional Rural Banks (RRBs)

4978. Shri Captain Brijesh Chowta:

Shri Anurag Singh Thakur:

Shri Jagdambika Pal:

Will the Minister of FINANCE be pleased to state:

(a) whether the Government has undertaken a review of the performance and financial health of Regional Rural Banks (RRBs) across the country in recent years, if so, the details thereof;

(b) whether it is a fact that RRBs have shown improvement in key financial indicators, including profitability, reduction in NPAs and expansion of business in recent years, if so, the details thereof;

(c) the details of the total number of RRBs, their branch network including number of branches, State-wise and district-wise particularly in Himachal Pradesh and Karnataka, including Dakshina Kannada along with total business and net profit recorded during the last three years, bank-wise;

(d) the measures taken by the Government to strengthen RRBs through consolidation, capital infusion, digital banking infrastructure and improved governance; and

(e) the steps taken to further enhance the role of RRBs in promoting financial inclusion, priority sector lending and rural credit access across the country? ANSWER THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) & (b): Government of India regularly reviews the performance and financial health of Regional Rural Banks (RRBs) at national and regional levels. The following reviews of RRBs

have been held under the Chairpersonship of Finance Minister in last four financial years:

Sr. No National/Regional level Date and Place

1. National level 07.07.2022 at New Delhi

2. North-Eastern RRBs 21.07.2023 at Agartala3. Southern RRBs 04.08.2023 at Chennai

4. Northern RRBs 30.08.2023 at New Delhi

5. National level 19.08.2024 at New Delhi

6. Western-Central RRBs 22.08.2024 at Udaipur

7. North-Eastern RRBs 30.09.2024 at Itanagar

8. Southern RRBs 09.11.2024 at Bengaluru

9. Eastern RRBs 29.11.2024 at Patna

10. Karnataka Grameena Bank 16.10.2025 at Ballari Further, as a follow-up, Department of Financial Services (DFS) conducts periodic and regular meetings with RRBs and sponsor banks at various levels.

Financial health of RRBs has improved in the recent years. RRBs posted the highest ever consolidated net profit of Rs. 7,571 Crore during FY 2023-24, followed by second highest net profit of Rs. 6,820 Crore during FY 2024-25. In nine months (April-Dec) of FY 2025-26, RRBs have posted consolidated net profit of Rs. 7,160 Crore (Provisional). RRBs have also shown consistent improvement in key financial parameters like Capital to Risk Asset Ratio (CRAR), deposits, advances, Non-Performing Asset (NPA), Credit-Deposit Ratio (CD ratio) etc.

Performance of RRBs on key financial parameters in past three years is at Annexure I.

(c) As on 31.12.2025, there are 28 RRBs operating in 26 States and 3 Union Territories having 22,207 branches. RRB wise detail of number of branches is at Annexure II.

Himachal Pradesh Gramin Bank (HPGB) is operating in the state of Himachal Pradesh and Karnataka Grameena Bank (KGB) is operating in the state of Karnataka. Details of the district wise branch network for the RRBs in Himachal Pradesh and Karnataka as on 31.12.2025 is given in Annexure III and Annexure IV respectively.

Total Business and Net Profit of the RRBs in Himachal Pradesh and Karnataka during the last three Financial Years (FY) are as follows:

HPGB (In Rs. Crore) Sr. No. Financial Year Total Business Net Profit 1 2022-23 11,112 2.17 2 2023-24 12,327 6.89 3 2024-25 13,616 34.71

Source: NABARD In FY 2025-26 (April-Dec), the total business and net profit of HPGB is Rs. 14,492 Crore and Rs. 26.07 Crore (Provisional) respectively.

Karnataka Gramin Bank (erstwhile) (In Rs. Crore) Sr. No. Financial Year Total Business Net Profit 1 2022-23 61,202 7.56 2 2023-24 62,422 -174.27 3 2024-25 63,533 -791.31Karnataka Vikas Grameena Bank (erstwhile) (In Rs. Crore) Sr. No. Financial Year Total Business Net Profit 1 2022-23 32,450 40.25 2 2023-24 35,383 104.17 3 2024-25 37,912 126.04

Source: NABARD Both the above erstwhile RRBs of Karnataka amalgamated on 01.05.2025 and the new entity is now Karnataka Grameena Bank. In FY 2025-26 (April-Dec), the total business and net profit of KGB is Rs. 1,02,063 Crore and Rs. 32 Crore (Provisional) respectively.

(d) The Government has implemented following strategy to strengthen RRBs :

1) Phased Implementation of Amalgamation of RRBs:

In order to improve operational viability of RRBs and to take advantage of economies of scale, Government of India initiated phase wise structural consolidation of RRBs in FY 2005-06. In the first three phases (2005-2021), the number of RRBs were brought down from 196 to 43 by March

2021.

In the fourth phase of amalgamation, guided by the principle of ‘One State-One RRB’, the number of RRBs were further reduced from 43 to 28 on 01.05.2025.

(2) Recapitalisation of RRBs: In order to improve Capital to Risk weighted Assets Ratio

(CRAR) of RRBs, the Government of India approved recapitalization of Rs.10,890 crore (including Government of India share of Rs.5,445 crore) which was infused in RRBs from the FY 2021-22 to FY 2024-25.

3) Implementation of Viability Plan Framework: Consequent upon the sanction of recapitalisation assistance to RRBs, all RRBs rolled out a 3-year Board approved Viability Plan with SMART (Specific, Measurable, Achievable, Relevant, Time-bound) metrics from FY 2022- 23 to FY 2024-25 with a well-defined implementation mechanism aimed at achieving sustained viability through credit expansion, business diversification, asset quality improvement, cost rationalization, technology adoption and improvement in corporate governance.

4) Digital Banking Infrastructure: All RRBs have implemented Core Banking Solution (CBS) and most of them provide digital services like Mobile Banking, Internet Banking, UPI and Contactless Debit card to their customers.

5) Improved Governance: For better governance, Department of Financial Services has appointed Government Nominee Directors in the board of all RRBs. Further, Sponsor Banks are advised to hand hold their respective RRBs for better corporate governance.

(e) RRBs were established as an alternate financial institution for credit dispensation to small and marginal farmers, agricultural labourers, socio-economically weaker section of population for development of agriculture, trade, commerce, small scale industry and other productive activities in rural areas. RRBs have consistently met, and often exceeded, their Priority SectorLending (PSL) targets and sub-targets over the years. Nearly, 92% branches of RRBs are in rural/semi-urban areas. These branches are largely meeting credit requirements in these areas.

Government regularly reviews the progress made by RRBs in deepening financial inclusion in rural and remote areas. The targets for various financial inclusion schemes like Pradhan Mantri Jan-Dhan Yojana (PMJDY), Pradhan Mantri MUDRA Yojana (PMMY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Atal Pension Yojana (APY) are set by DFS and periodically monitored.

Further, RRBs have participated in Gram Panchayat (GP) level Saturation Campaign of DFS from 01.07.2025 to 31.10.2025 for achieving comprehensive financial inclusion. ******ANNEXURE I ANNEXURE REFERRED TO IN PART (a) & (b) OF LOK SABHA UNSTARRED QUESTION NO 4978 ON “REVIEW OF PERFORMANCE OF REGIONAL RURAL BANKS (RRBS)” FOR ANSWER ON 23.03.2026 Performance of RRBs on Key Financial Parameters As on 31 December Sr. Key Financial FY FY FY 2025 No. Parameters 2022-23 2023-24 2024-25

(Provisional) Total Deposits

1. 6,08,509 6,59,815 7,13,800 7,33,959 (In Rs. Crore) Loans Outstanding

2. 4,14,368 4,71,384 5,26,763 5,65,614 (In Rs. Crore) Credit-Deposit Ratio

3. 68.1 71.4 73.8 77.0 (CD ratio) (%) Gross Non-

4. Performing Asset (GNPA) 7.2 6.1 5.4 5.6 (%) Net Non-Performing

5. 3.2 2.4 2.0 2.2 Asset (NNPA) (%) Net Profit

6. 4,974 7,571 6,820 7,160 (In Rs. Crore) Net Worth

7. 47,451 56,780 63,927 71,712 (In Rs. Crore) Capital to Risk

8. Weighted Assets 13.4 14.2 14.4 15.0 Ratio (CRAR) (%)

Source: RRBsANNEXURE II ANNEXURE REFERRED TO IN PART (c) OF LOK SABHA UNSTARRED QUESTION NO. 4978 ON “REVIEW OF PERFORMANCE OF REGIONAL RURAL BANKS

(RRBs)” FOR ANSWER ON 23.03.2026 Sr.

Name of the RRB No of Branches (As on 31.12.2025) No.

1 Andhra Pradesh Grameena Bank 1,351 2 Arunachal Pradesh Rural Bank 38 3 Assam Gramin Bank 464 4 Bihar Gramin Bank 2,101 5 Chhattisgarh Gramin Bank 627 6 Gujarat Gramin Bank 745 7 Haryana Gramin Bank 693 8 Himachal Pradesh Gramin Bank 274 9 Jammu and Kashmir Grameen Bank 326 10 Jharkhand Gramin Bank 449 11 Karnataka Grameena Bank 1,750 12 Kerala Grameena Bank 635 13 Madhya Pradesh Gramin Bank 1,319 14 Maharashtra Gramin Bank 752 15 Manipur Rural Bank 27 16 Meghalaya Rural Bank 89 17 Mizoram Rural Bank 106 18 Nagaland Rural Bank 14 19 Odisha Grameen Bank 979 20 Puducherry Grama Bank 48 21 Punjab Gramin Bank 470 22 Rajasthan Gramin Bank 1,596 23 Tamil Nadu Grama Bank 685 24 Telangana Grameena Bank 933 25 Tripura Gramin Bank 150 26 Uttar Pradesh Gramin Bank 4,330 27 Uttarakhand Gramin Bank 296 28 West Bengal Gramin Bank 960 Total 22,207

Source: RRBsANNEXURE III ANNEXURE REFERRED TO IN PART (c) OF LOK SABHA UNSTARRED QUESTION NO. 4978 ON “REVIEW OF PERFORMANCE OF REGIONAL RURAL BANKS

(RRBs)” FOR ANSWER ON 23.03.2026 District Wise No of Branches of Himachal Pradesh Gramin Bank Sr.

Name of the District No of Branches (As on 31.12.2025) No.

1 Bilaspur 14 2 Chamba 39 3 Hamirpur 25 4 Kangra 52 5 Kinnaur 3 6 Kullu 19 7 Lahaul and Spiti 2 8 Mandi 57 9 Shimla 26 10 Sirmaur 9 11 Solan 14 12 Una 14 Total 274

Source: HPGBANNEXURE IV ANNEXURE REFERRED TO IN PART (c) OF LOK SABHA UNSTARRED QUESTION NO. 4978 ON “REVIEW OF PERFORMANCE OF REGIONAL RURAL BANKS (RRBs)” FOR ANSWER ON 23.03.2026 District Wise No of Branches of Karnataka Grameena Bank Sr No Name of District No of Branches (As on 31.12.2025) 1 Bagalkote 76 2 Ballari 52 3 Belagavi 167 4 Bengaluru Rural 19 5 Bengaluru South 14 6 Bengaluru Urban 51 7 Bidar 51 8 Chamarajanagara 26 9 Chikkaballapura 37 10 Chikkamagaluru 52 11 Chitradurga 84 12 Dakshina Kannada 24 13 Davanagere 51 14 Dharwad 75 15 Gadag 61 16 Hassan 60 17 Haveri 77 18 Kalaburagi 87 19 Kodagu 26 20 Kolar 45 21 Koppal 51 22 Mandya 58 23 Mysuru 95 24 Raichur 68 25 Shivamogga 42 26 Tumakuru 67 27 Udupi 23 28 Uttara Kannada 46 29 Vijayanagara 50 30 Vijayapura 79 31 Yadgir 36 Total 1,750

Source: KGB