India Merges 26 Rural Banks, Big Boost For Villages & Small Towns; Over 22,000 Branches To Serve Rural India Better

Mumbai: In a big move to make banking easier and better in villages, the Indian government has merged 26 Regional Rural Banks (RRBs) across 11 states and Union Territories. This change came into effect on Thursday, May 1.

The Department of Financial Services (DFS) called this step a big push towards better banking, more loans, and stronger rural support. This is the fourth phase of RRB consolidation and follows the idea of ‘One State One RRB’.

Amalgamation of 26 Regional Rural Banks (RRBs) in 11 States/UT takes effect from today, marking a significant step toward strong RRBs, better governance, improved credit flow and financial inclusion.#RRBs #OneStateOneRRB@FinMinIndia @nsitharamanoffc @PIB_India @DDNewslive

— DFS (@DFS_India) May 1, 2025

The Finance Ministry began working on this merger in November 2024, after talking to all the key people involved. The main aim is to improve how RRBs work, reduce costs, and reach more people in remote areas.

With this new phase, India now has 28 RRBs serving 26 states and two Union Territories. Together, they run more than 22,000 branches in 700 districts. Nearly 92% of these branches are in rural and semi-urban areas, making sure even the far-off villages get banking services.

The process to reduce the number of RRBs started years ago:

• Phase I (2006–2010): 196 RRBs reduced to 82

• Phase II (2013–2015): 82 reduced to 56

• Phase III (2019–2021): 56 reduced to 43

• Phase IV (2024–2025): Now 28 remain

RRBs have been helping rural India since 1975 by giving loans and services to small farmers, artisans, and local businesses. This merger will help them serve better, faster, and wider.