In March 2025, the Indian Government announced the merger of how many Regional Rural Banks (RRBs) under the “one state, one RRB” initiative?
- (a)15
- (b)20
- (c)26
- (d)30
Correct — C, 26.
The 2025 round of consolidation folded 26 Regional Rural Banks into 11 new banks, one each for the 10 states and one union territory that still had more than one RRB on their books.
India had 43 RRBs going into the exercise. Taking out 26 and putting 11 in their place leaves 28, which is the number of RRBs the Reserve Bank now lists. The amalgamations took effect from 1 May 2025.
"One state, one RRB" names the destination, not the count of banks merged. The stem asks how many banks went into the exercise, not how many came out of it.
- (a)15 — Fifteen is the percentage of an RRB's paid-up capital held by the State Government in which the bank operates — the Central Government holds 50 per cent and the sponsor commercial bank 35.
It belongs to the ownership formula, not to the merger arithmetic. The figures published for the 2025 round are 43 before, 26 amalgamated, 11 created and 28 afterwards.
- (b)20 — Twenty is the count of banks nationalised in the two big rounds — fourteen in July 1969 and six more in April 1980.
Both are government-reorganisation-of-banks facts, but 1969 and 1980 concern large commercial banks, while the 2025 figure counts Regional Rural Banks.
- (d)30 — Thirty is the option nearest the 28 RRBs left operating once the amalgamation took effect on 1 May 2025, and that is the figure it shadows.
The stem asks for banks merged, and the round has three distinct numbers: 26 went in, 11 were created, 28 remain. Rounding 28 up to 30 answers a different question and misses even that one.
A Regional Rural Bank is a rural-facing scheduled commercial bank set up under the Regional Rural Banks Act, 1976 (the first five having opened in 1975 under an ordinance that the Act replaced).
It is jointly owned by the Central Government, a sponsor commercial bank and the State Government in whose territory it works.
Because each RRB was tied to a sponsor bank rather than to a state, several states ended up with two, three or four RRBs operating side by side in the same villages.
"One state, one RRB" is the policy of collapsing those into a single RRB per state, so that one balance sheet, one technology platform and one branch network serve the whole state.
RRB consolidation has run in phases since the mid-2000s. The count came down from 196 at its peak to 43 by the early 2020s, and the 2025 round took it to 28.
The rationale is scale. A larger RRB can carry core-banking and technology costs, hold capital more comfortably and lend more without repeated recapitalisation by its three owners.
For a Uttarakhand paper there is a local anchor worth holding. Uttarakhand is served by a single RRB, Uttarakhand Gramin Bank, so the state was already where the 2025 round was pushing others.
- Twenty-six Regional Rural Banks were amalgamated into 11 under the 2025 "one state, one RRB" round.
- The round covered 10 states and one union territory — those that still had more than one RRB.
- The number of RRBs in India fell from 43 to 28; the Reserve Bank's list of RRBs shows 28.
- The amalgamations took effect from 1 May 2025.
- An RRB's paid-up capital is held 50 per cent by the Central Government, 35 per cent by the sponsor bank and 15 per cent by the State Government.
- RRBs were created under the Regional Rural Banks Act, 1976; the first five began work on 2 October 1975 under an ordinance.
- RRBs are regulated by the Reserve Bank of India and supervised by NABARD.
- Andhra Pradesh went into the 2025 round with four RRBs; Uttar Pradesh and West Bengal with three each.
- Uttarakhand is served by a single RRB, Uttarakhand Gramin Bank.
One exercise, several figures: the question asks for the number that went in (26), not the number created (11) or the number left standing (28).
- The stem counts banks merged, not banks remaining. 26 went in, 11 were created, 28 operate afterwards — three different figures from one exercise.
- "One state, one RRB" describes the target state of affairs, so it cannot be read as a count. A state already served by a single RRB, Uttarakhand among them, saw no change in this round.
- 15 in the RRB story is the State Government's equity share, not a number of banks.
- An RRB amalgamation is notified by the Central Government under the Regional Rural Banks Act, 1976, in consultation with NABARD, the sponsor banks and the State Governments concerned — attributing it to an RBI order gets the instrument wrong.
- The Act is of 1976 while the first five RRBs opened on 2 October 1975, so the two years answer different questions.
One shape is a plain number — how many RRBs merged, how many remain, how many states were covered. The defence is to hold all the figures of the 2025 round together rather than memorising one of them.
A second shape is institutional: which Act governs RRBs, who owns them in what proportion, who regulates them and who supervises them.
A third places RRBs inside a list of rural-credit or financial-inclusion institutions and asks which of them lend directly to rural households, or which count as steps towards financial inclusion.
UPSC_2018_GS1_Q962018Same theme — bank consolidation as government policy, there through the merger of the associate banks into the parent State Bank of India. What differs is the class of bank and the task: that item asks whether statements about public sector bank mergers and capital infusion are correct, while this one asks for a count of Regional Rural Banks merged in 2025.
UPSC_2013_GS1_Q422013Same underlying question of who may direct a bank merger — that item places merger of banks among the Reserve Bank's regulatory powers over commercial banks. What differs is the instrument at work here: an RRB amalgamation is notified by the Central Government under the Regional Rural Banks Act, 1976, in consultation with NABARD, the sponsor banks and the State Governments concerned.
UPSC_2010_GS1_Q1382010Same institution, different angle. That item treats the formation of RRBs as a step towards financial inclusion, so it tests why RRBs exist; this one tests a 2025 number. The overlap is the concept of the RRB, not the fact being asked.
UPPSC_2024_PRE_GSI_Q1172024The same financial-inclusion item as UPSC 2010, repeated in a state paper with the options reshuffled, again on the formation of RRBs. It shows the institution being asked as a static concept, whereas this UKPSC item turns on a current-affairs figure from 2025.
- practice — not a real PYQ
After the 2025 "one state, one RRB" amalgamation took effect, how many Regional Rural Banks were left operating in India?
- (a)11
- (b)26
- (c)28
- (d)43
Answerc — 28. India had 43 RRBs before the round and 26 of them were amalgamated into 11, so 43 minus 26 plus 11 leaves 28. That is the number of RRBs the Reserve Bank lists.(a) 11 is the number of new RRBs created, one for each of the 10 states and one union territory covered. (b) 26 is the number merged, which is what the UKPSC 2025 item asked for. (d) 43 is the count before the round began.
- practice — not a real PYQ
The paid-up capital of a Regional Rural Bank is shared between the Central Government, the sponsor bank and the State Government in the ratio:
- (a)50 : 35 : 15
- (b)50 : 15 : 35
- (c)35 : 50 : 15
- (d)60 : 25 : 15
Answera — 50 : 35 : 15. The Central Government holds half the capital, the sponsor commercial bank 35 per cent and the State Government in which the bank operates 15 per cent.(b) swaps the sponsor bank's share with the State Government's. (c) makes the sponsor bank the largest holder, whereas the Central Government holds the largest share. (d) gets the State Government's 15 right but moves 10 percentage points from the sponsor bank to the Centre.
- practice — not a real PYQ
The statute governing Regional Rural Banks in India is the Regional Rural Banks Act of:
- (a)1969
- (b)1975
- (c)1976
- (d)1980
Answerc — 1976. The Regional Rural Banks Act, 1976 is the governing statute for RRBs and is the law under which their amalgamation is notified.(b) 1975 is when the first five RRBs opened, on 2 October, under an ordinance that this Act later replaced. (a) 1969 is the year fourteen commercial banks were nationalised. (d) 1980 is the year six more banks were nationalised.