The government is now keeping its eyes on rural banks. Let us tell you that there are currently 43 rural banks in the country, whose number may come down to 28. The government is planning to merge these banks. This will reduce the cost as well as increase the capital base. For this, the government has also prepared the documents. Rural banks give credit to small farmers, agricultural laborers and businessmen who do not have access to capital and technology.

As of March 31, 2024, these banks collectively had deposits of ₹6.6 lakh crore, with advances of ₹4.7 lakh crore. According to a banking official, after the merger, only one Regional Rural Bank (RRB) will operate in each state. The Finance Ministry has not responded to emails related to the matter. Currently, government-owned banks still dominate more than half of the banking sector in India in terms of assets. The government has tried to consolidate the banks to improve their functioning and reduce their dependence on the government for capital.

How much has the number decreased

For your information, let us tell you that the central government has 50 percent stake in regional rural banks, sponsor or scheduled banks have 35 percent and state government has 15 percent stake. The government started the process of consolidating banks in 2004-05. By 2020-21, this number had reduced from 196 to 43. Apart from this, there is also a plan to merge two regional banks in Maharashtra in this proposal. Along with this, there is talk of merging four banks in Andhra Pradesh as well.