**Summary:**
On May 5, 2025, Sh. M. Nagaraju, Secretary of the Department of Financial Services (DFS), Ministry of Finance, conducted a review in Mumbai regarding the performance of Regional Rural Banks (RRBs) and the progress of their amalgamation plan. The review included participation from the Chairman of NABARD, officials from DFS, Sponsor banks, SIDBI, Reserve Bank of India, and Chairpersons of all RRBs.
Key discussion points included leveraging RRB lending in agriculture and allied activities, MSMEs, and government-sponsored schemes, particularly in light of the "One State-One RRB" initiative. RRBs currently operate over 22,000 branches across 700 districts, with over 92% of branches located in rural/semi-urban areas. The RRBs recorded a consolidated net profit of ₹7,148 crore in FY 2024-25, and Gross Non-Performing Assets (GNPA) have decreased to a decade-low of 5.3%.
Secretary Nagaraju emphasized the importance of continuing the amalgamation process and ensuring the long-term sustainability of RRBs. Sponsor Banks were urged to guide RRBs through the amalgamation process, provide a level playing field, facilitate technology upgrades, and complete integration by the deadline of September 30, 2025. Addressing HR-related issues arising from the amalgamation was also highlighted. Sponsor banks, in consultation with RRBs, are to draft a roadmap for RRBs for the next 5 years.
Key Entities Referenced
Ministry of Finance: A department of the Government responsible for financial matters.
Department of Financial Services: A department within the Ministry of Finance.
Regional Rural Banks: Indian rural banks regulated by the Reserve Bank of India.
Mumbai, Maharashtra: City in India where performance review took place.
NABARD: National Bank for Agriculture and Rural Development in India.
SIDBI: Small Industries Development Bank of India.
Reserve Bank of India: The central bank of India.
MSME: Micro, Small and Medium Enterprises
Ministry of Finance
Secretary, DFS reviews performance of Regional
Rural Banks (RRBs) and progress on amalgamation
plan
Shri. M. Nagaraju urges RRBs to leverage its lending
in Agriculture and allied activities, MSME and
Government sponsored schemes
Posted On: 05 MAY 2025 7:25PM by PIB Delhi
Sh. M. Nagaraju, Secretary, Department of Financial Services, Ministry of Finance, reviewed performance of
Regional Rural Banks (RRBs) and progress on amalgamation plan in Mumbai.
Chairman, NABARD and officials of DFS, Sponsor banks, SIDBI, Reserve Bank of India and Chairpersons
of all RRBs were also present.
With the implementation of One State-One RRB, RRBs have been urged to leverage its lending in Agriculture
and allied activities, MSME and Government sponsored schemes. RRBs have grown in their reach to more
than 22,000 branches, covering 700 districts of the country and more than 92% of its branches are in
rural/semi urban areas. RRBs have recorded consolidated net profit of ₹7,148 crore in FY 2024-25. Gross
Non-Performing Assets (GNPA) has reached a new low of 5.3%, lowest in a decade period. Secretary, DFS
urged the rural banks to continue to focus on their amalgamation process and long-term sustainability.Secretary, DFS asked Sponsor Banks to guide RRBs in their amalgamation process and provide level playing
field for long term sustainability. Sponsor banks should continue to facilitate technology upgradation in RRBs
and to complete integration process adhering to the strict timelines of 30-09-2025. He also suggested Sponsor
Banks and RRBs to also address HR related issues emerging in the process.
He asked sponsor banks and RRBs to recognize the challenges that lie ahead. Sponsor banks in consultation
with RRBs to draft a roadmap for RRBs for next 5 years.
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NB/AD
(Release ID: 2127138)