The government is now eyeing regional rural banks. There are currently 43 rural banks in the country. The government now wants to reduce its number to 28. For this, some banks have merger plans with other banks. This merger will help the banks to reduce costs and increase the capital base. According to a report, the government has prepared a document for it. In which there is a proposal for merger of rural banks. Regional rural banks provide credit to small farmers, agricultural laborers and small traders but lack adequate access to capital and technology.
According to the figures till March 31, 2024, these banks had total deposits of Rs 6.6 lakh crore while advances were Rs 4.7 lakh crore. According to a banker, after the proposed merger, there will be only one regional rural bank in one state. In terms of assets, state-owned banks still hold more than half of the banking sector in the country.
The government has tried to consolidate banks to improve their performance and reduce their dependence on the government for capital. As of the end of March 2023, Regional Rural Banks had a total of 21,995 branches in the country, with a total of 30.6 crore deposit accounts and 2.9 crore loan accounts in 26 states and 3 union territories. According to a recent report, the total deposits, advances and investments of 43 rural sector banks were Rs.6,08,509 crore, Rs.3,86,951 crore and Rs.3,13,401 crore respectively.
The number of regional banks has been reduced from 196 to 43 The central government owns 50%, sponsored or scheduled banks 35% and state government 15% in regional rural banks. The government started trying to consolidate banks in 2004-05. Its number was reduced from 196 to 43 by 2020-21. The proposal has a plan for merger of two regional banks of Maharashtra. Also, the merger of four banks of Andhra Pradesh is also being discussed.
Image Credit: (Divya-Bhaskar): Images/graphics belong to (Divya-Bhaskar).
