The Department of Financial Services (DFS) under the Ministry of Finance on Tuesday notified the amalgamation of 26 Regional Rural Banks (RRBs) as part of the fourth phase of RRB consolidation. The move follows the principle of “One State, One RRB” and aims to improve operational efficiency and cost rationalization.

The decision, based on an official statement issued by the Ministry, comes after the government initiated a stakeholder consultation process in November 2024. The amalgamation covers RRBs operating across 10 states and one union territory.

According to the Ministry, the consolidation is expected to enhance the scale of operations and optimize resource use, building on the success of previous phases of amalgamation that have improved the performance of RRBs.

Prior to the latest restructuring, 43 RRBs were operational across 26 states and 2 union territories. Following the merger, the total number of RRBs has been reduced to 28. These banks collectively operate more than 22,000 branches, serving around 700 districts nationwide. Approximately 92% of these branches are located in rural and semi-urban areas, reaffirming the banks’ core mandate of rural financial inclusion.

This marks the fourth round of RRB amalgamations undertaken by the government. In the first phase (FY 2006 to FY 2010), the number of RRBs was reduced from 196 to 82. The second phase (FY 2013 to FY 2015) brought the number down to 56, while the third phase (FY 2019 to FY 2021) further reduced it to 43.