New Delhi: The Department of Financial Services (DFS), under the Ministry of Finance, has officially announced the amalgamation of 26 Regional Rural Banks (RRBs) as part of the fourth phase of RRB consolidation. The restructuring aligns with the government’s vision of “One State, One RRB”, aiming to boost operational efficiency and reduce costs.

The Ministry confirmed that this major decision follows an extensive stakeholder consultation process initiated in November 2024. The merger involves RRBs operating in 10 Indian states and one union territory, significantly transforming the rural banking landscape.

According to the Ministry of Finance, this consolidation will help enhance economies of scale, streamline operations, and maximize resource utilization, building on the success of previous merger phases. Earlier rounds of consolidation had a measurable positive impact on the performance and stability of RRBs.

Prior to this latest move, 43 RRBs were functional across 26 states and 2 union territories. After the merger, the number has now been brought down to 28 Regional Rural Banks, which collectively run over 22,000 branches, catering to approximately 700 districts across the country. Notably, 92% of these branches are located in rural and semi-urban areas, reinforcing the banks’ core mission of promoting rural financial inclusion.

This is the fourth round of RRB mergers undertaken by the Indian government:

• Phase 1 (FY 2006–2010): Reduced RRBs from 196 to 82
• Phase 2 (FY 2013–2015): Brought the number down to 56
• Phase 3 (FY 2019–2021): Further consolidated to 43 RRBs
• Phase 4 (2025): Now consolidated to 28 RRBs

This continued reform in the rural banking sector is expected to create a stronger, more efficient financial ecosystem to serve India’s rural population better.