The finance ministry has asked public sector banks to examine the feasibility of merger of some of the regional rural banks (RRBs) operating within the same states as part of a consolidation plan. The ministry wants the total number of RRBs in the country to be less than 15, according to news reports. At present, there are 56 RRBs, 14 of these sponsored by the State Bank of India alone. The shareholding pattern of the RRBs is that the central government holds 50% of the stake, sponsor banks 35% and the state government 15%. The ministry wants one bank leveraging its strong regional and market connect instead of 3-4 regional lenders in the state. According to the plan mooted by the government, a lead bank, which has more presence in a particular area, can take over the stake of another bank in an RRB for purposes of synergy and efficiencies.
