Performance of Regional Rural Banks after Amalgamation in India: Progress and Prospects

Abstract

For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons for India's growth process. The government's regular policy for Indian banks since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Regional Rural Banks started their development process on 2 October 1975 with the formation of a single bank—Prathama Grameen Bank. The RRBs mobilize financial resources from rural/semi-urban areas and grant loans and advances mostly to small and marginal farmers, agricultural labourers and rural artisans. The area of operation of RRBs is limited to the area as notified by GoI covering one or more districts in the State. In this context, the present study is an attempt to examine the impact of amalgamation on physical performance of RRBs during post-amalgamation period.