JOIN USThe process of cross-merger of regional rural banks (RRBs) has gathered pace with the Ministry of Finance asking states to give their consent.
The Centre intends to reduce the number of RRBs to 46 from the current 82 by the end of this year. Out of 28 states, only four states -- Karnataka, Tamil Nadu, Orissa and Chattisgarh, -- have given their consent. The Finance Ministry might issue a notification to these states next month, approving the merger. For other states, notifications will be issued when their consent is received, officials said.
The consent of the state is necessary as it owns 15 per cent stake in RRBs, while 35 per cent is owned by sponsor banks and 50 per cent by the Centre.
Currently, 82 RRBs sponsored by 26 large commercial banks operate in 640 districts, of which 75 are making profit. Post the merger, the number of sponsored banks will fall to 20, though the number of branches will remain the same.