The Ministry of Finance Secretary, DFS, has reviewed the performance and progress in amalgamation plans for Regional Rural Banks (RRBs) across India. Urging RRBs to concentrate their lending towards agriculture, micro, small and medium enterprises (MSMEs), and government-sponsored schemes, DFS emphasizes the importance of these sectors in driving economic development. With the implementation of 'One StateOne RRB', there is a focus on expanding coverage and deepening service penetration into rural and semi-urban areas. The review highlights improvements such as an increase in branches to exceed 22,000 across 700 districts, a growth surpassing 92% in such regions, alongside recording a consolidated net profit of Rs. 7148 crore for the fiscal year FY 2024-25. The Secretary emphasizes the need for continuous focus on amalgamation and long-term sustainability, urging sponsor banks to guide RRBs through this process while ensuring a level playing field. There is also an emphasis on technology upgrades facilitated by sponsor banks in order to complete integration processes before the deadline set for September 30, 2025. The conversation also addresses HR-related challenges that may emerge during consolidation and calls for a strategic roadmap from sponsor banks and RRBs for the next five years. DFS acknowledges the recognition of forthcoming obstacles and requests for proactive planning by both banks.
Key points:
1. Review of RRB performance.
2. Focus on agriculture, MSMEs, government schemes.
3. Growth in rural banking presence and profitability.
4. Emphasis on amalgamation plans and long-term sustainability.
5. Role of sponsor banks in guidance and technology upgrades.
6. Deadline for integration processes set by DFS.
7. Addressing HR challenges during consolidation.
8. Plan required from both parties for next 5 years by sponsor banks.
Key Entities Referenced
Ministry of Finance: Government department responsible for economic policies and financial management.
DFS (Department of Financial Services): A section within the Ministry of Finance in charge of matters related to finance in India.
Regional Rural Banks RRBs: Banks that operate primarily for the development of rural areas, focusing on lending and other services targeted at agriculture, MSMEs, and government-sponsored activities.
NABARD (National Bank for Agriculture and Rural Development): Government institution aimed to promote agricultural growth through credit facilitation, financial inclusion, and support schemes.
SIDBI (Small Industries Development Bank of India): Credit institution dedicated to the development and financing of small and medium enterprises.
Reserve Bank of India: Central banking authority that issues currency, regulates monetary policy, and oversees financial stability.
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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(Release ID: 2127138)