Regional Rural Banks (RRBs) have posted a strong performance in the first half of FY 2025–26, with their total business crossing ₹12 lakh crore, according to the Department of Financial Services (DFS).

The performance was reviewed on Tuesday at a meeting chaired by the Secretary, DFS, and attended by the Chairman of NABARD, heads of all 28 RRBs, officials from sponsor banks, SIDBI and the Reserve Bank of India.

Officials noted that the combined business of RRBs in the April–December period has surpassed that of some individual public sector banks. At present, 28 RRBs operate through 22,158 branches across 26 states and three Union Territories, covering around 730 districts.

Together, these banks serve about 32.4 crore deposit accounts and 3.2 crore loan accounts. Provisional data shows that RRBs recorded a net profit of ₹7,720 crore up to December 2025, higher than the consolidated profit of ₹6,820 crore reported in FY25. Asset quality also improved, with both gross and net non-performing assets continuing to decline.

The meeting also highlighted the role of RRBs in financial inclusion. During the current financial year, they opened over 45.68 lakh new Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts. RRBs have also met all priority sector lending targets, underlining their focus on rural and vulnerable sections.

Appreciating the performance, the DFS Secretary said RRBs must “sustain the momentum and aim for further improvement in the coming quarters.” He stressed that banks should expand coverage of social security schemes in rural areas and diversify their loan portfolios to reduce risk.

The Secretary also flagged the need to strengthen IT systems and push digital delivery of financial services. “Improving grievance redressal, especially for customers in remote and far-flung areas, should be a key priority,” he said.

He urged RRBs, NABARD and sponsor banks to jointly assess emerging challenges and improve preparedness. “Proactive planning and coordination will be critical for maintaining growth while serving rural India effectively,” the official added.

The government sees RRBs as a crucial link in extending formal banking, credit and welfare schemes to the countryside, officials said.