Govt aims to list 5 regional rural banks by FY27: Report

The initiative is part of the Centre’s broader strategy to improve operational efficiency and cut costs within rural banking.

Following the consolidation of Regional Rural Banks (RRBs) under the "One State, One RRB" initiative—designed to enhance operational efficiency and reduce intra-public sector bank competition—the central government is planning to list at least five RRBs by the close of the 2026–27 fiscal year, according to a report by Business Standard on Saturday.

With the latest round of mergers taking effect on May 1, the number of RRBs now stands at 28 across 26 states and two Union Territories, operating through more than 22,000 branches that collectively serve 700 districts. “Our objective is to bolster the image of RRBs as trustworthy and high-value institutions for both stakeholders and investors. If these banks continue to...,” a government official was quoted as saying.

What are the listing criteria for RRBs?

Minimum net worth of Rs 300 crore for the last three fiscals

Capital adequacy ratio above 9% for three years

In past five year, need to have RoE of 10% for three years on the dot

The RRB aspiring to be listed must not be under central bank's corrective action ecosystem

In the latest move to streamline the rural banking sector, the Department of Financial Services (DFS) under the Ministry of Finance announced the fourth phase of Regional Rural Bank (RRB) mergers last month. This phase will consolidate 26 RRBs into larger, state-specific entities under the "One State, One RRB" framework. The initiative is part of the Centre’s broader strategy to improve operational efficiency and cut costs within rural banking.

This round of mergers impacts ten states and one union territory, reducing the overall number of RRBs in India from 43 to 28. These 28 RRBs, operating across 26 states and two union territories, collectively manage over 22,000 branches—around 92% of which are located in rural and semi-urban regions—serving approximately 700 districts nationwide.