The fourth stage of the Regional Rural Banks (RRBs) merger has been announced by the Ministry of Finance's Department of Financial Services (DFS), which will combine 26 RRBs into bigger, state-based organizations based on the "One State One RRB" concept. This action is a part of the Centre's ongoing efforts to increase operational effectiveness and reduce expenses in the rural banking industry.

Ten states and one union territory are affected by the current phase, which lowers the total number of RRBs in the nation from 43 to 28. With more than 22,000 branches, nearly 92% of which are situated in rural and semi-urban areas and serve about 700 districts, these 28 RRBs will now operate in 26 states and 2 UTs.

The government's November 2024 proposal, which sought input from stakeholders, was followed by the consolidation. The fourth phase was initiated after successful outcomes of previous mergers, which had already reduced the number of RRBs significantly—from 196 in FY 2006 to 43 in FY 2021.

A notable highlight in this round is the amalgamation of four RRBs in Andhra Pradesh—Chaitanya Godavari Grameena Bank, Andhra Pragathi Grameena Bank, Saptagiri Grameena Bank, and Andhra Pradesh Grameena Vikas Bank. These banks, earlier sponsored by Union Bank of India, Canara Bank, Indian Bank, and State Bank of India respectively, have now been merged to form a single entity named Andhra Pradesh Grameena Bank, with its headquarters in Amravati. The new entity will operate under the sponsorship of Union Bank of India.

Greater scale efficiency, less administrative function duplication, and more reliable banking services in rural areas are the goals of the consolidation, according to DFS. It is anticipated that the action will speed up financial inclusion and standardize service delivery.

The National Bank for Agriculture and Rural Development (NABARD), sponsor banks, and the relevant state governments were consulted during the merger process.