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Friday, January 10, 2025 | 02:25 AM ISTEN Hindi

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Road ahead for RRBs: Why consolidation is key to improving rural banking

All stakeholders in RRBs must aim to improve their efficiency and competitiveness. Smaller, loss-making banks should be allowed to be subsumed by sponsor banks or any other commercial bank

Listed small finance banks (SFBs) posted a decline in net profit by 0.6 per cent year-on-year (Y-o-Y) to Rs 1,300 crore during the first quarter of FY25 as provisions and contingencies more than doubled Y-o-Y to Rs 1,277 crore. Sequentially, the decl
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First batch of Regional Rural Banks (RRBs) were established in 1975 following the recommendations of a working group. The idea was to establish regionally focused banks, familiar with local issues, to extend banking services to rural areas. RRBs are owned jointly by the Government of India, the state government concerned, and the sponsoring commercial bank with an equity holding of 50, 15 and 35 per cent, respectively. While the Reserve Bank of India (RBI) regulates RRBs, the National Bank for Agriculture and Rural Development (Nabard) supervises them. As reported by this newspaper last week, the Union government

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