Govt may bring regional rural banks under a holding company in Budget

Move would improve governance, help lenders raise equity from the market

The government is working on a policy to bring regional rural banks (RRBs) under a holding company to better govern these lenders and help them raise equity from the market. The intention to further reform the regional rural banking space may feature in the Union Budget.

Currently, there are 43 RRBs in the country. The step would help centralise their functioning, improve efficiency and ensure they are run professionally. Also, there would be a common strategy for the 21,871 branches of these banks, said a senior government official.

An internal committee has been formed by the government with members from National Bank