Amalgamation of Malwa Gramin Bank and Sutluj Gramin Bank into Punjab Gramin Bank
By Anupama Deshpande | Jan 16, 2019
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Regional Rural Banks (RRBs) are the major lending source for Gramin Population in India. In order to increase their productivity and cut their overheads, notification of amalgamation of the 3 regional rural banks has been released on December 21, 2018 as part of the third phase of amalgamation push by the government which will bring down the number of RRBs across the country from 56 to 38.
Two such RRBs i.e. Malwa Gramin Bank (sponsored by State Bank of India) and Sutlej Gramin Bank (sponsored by Punjab & Sind Bank) have been amalgamated with Punjab Gramin Bank (sponsored by Punjab National Bank) with effect from January 1, 2019. After the amalgamation, the consolidated RRB is called Punjab Gramin Bank, with headquarters at Kapurthala in Pubjab. The consolidated entity will be sponsored by Punjab National Bank.
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The amalgamation has put following impacts on Punjab Gramin Bank:
- Increase in Capital from Rs. 22.50 crore to Rs. 25.36 crore
- Increase in Reserves from Rs. 692.56 crore to Rs. 912.95 crore
- Rise in Networth from Rs. 715.06 crore to Rs. 938.32 crore
After the recent amalgamation, the total number of RRBs in India has come down from 56 to 53.
Benefits of Consolidation of RRBs
Government has initiated the process of consolidation of RRBs for following points of importance:
- Improvement in their Capital
- Usage of Latest Technology
- Betterment in scale efficiency
- Higher Productivity
- Maximise Credit Flow
- Enhancement in their area of operation
- Reduction in overhead expenses
- Increase their exposure
- Improved financial inclusion
Important Points regarding Regional Rural Banks (RRBs)
- RRBs Have been established in 1975 by the government in order to address the credit needs of backward sections in rural areas.
- Out of the capital issued by an RRB, 50% is held by the central government, 15% by the concerned state government and 35% by the sponsor bank.
- Reserve Bank of India is the regulator of RRBs.
- Presently, there are total 53 RRBs in India having 21,747 branches
- The National Bank for Agriculture and Rural Development (Nabard) has proposed to bring down the number of RRBs to 38
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Anupama is a Co-Founder of CodeForBanks.com. She is an MBA (Finance) and Chartered Financial Analyst (CFA). She also carries a Fellowship degree in Life Insurance Sector and is a Master of Computer Application (MCA). She is an expert in Finance Field with an experience of over 18 years on different managerial positions in finance industry including Stock Market, Depository and Mutual Fund Sectors. Apart from that she has remained for few years in the field of marketing as well. Her suggestions and advice for investments have been very useful to many people.Her vast interest & expertise in the field of finance have encouraged her to write the articles so that others can also get benefitted out of them. She never loses any opportunity to learn and be creative. She is a valuable asset for CodeForBanks.com & important resource to all those around her.