The Punjab State Government is all set to amalgamate its regional rural banks (RRBs) as well as its district central cooperative banks. A formal decision to merge Punjab Gramin Bank, Malwa Gramin Bank and Satlej Gramin Bank has been taken.
The consent for the amalgamation of the three regional rural banks is expected to be given by the Council of Ministers in the Cabinet meeting scheduled for next week.
Sources in the Finance Department said the three banks would be merged into one entity as part of the Centre’s roll out of the third phase of amalgamation of RRBs, which has laid a roadmap to bring down their number across the country from 56 to 38. “The move will enable RRBs cut overheads, improve their capital and use technology, besides helping them draw better scale-efficiency, higher productivity, improved financial inclusion and greater credit flow to rural areas. In fact, we are actively considering the merger of district central cooperative banks, which will help revitalise these banks and increase their profitability,” said a Finance Department officer.
An earlier attempt made by the state government to amalgamate the RRBs six years ago had failed due to protests from bank unions.
Top functionaries told The Tribune that the decision to merge the three RRBs of Punjab had now been taken by the Union Government and since the state government had a 15 per cent share in the capital, the state had only to give its consent.
Consolidation on cards
As per the proposal, Malwa Gramin Bank and Satlej Gramin Bank will be merged into Punjab Gramin Bank. The merged entity will be sponsored by Punjab National Bank.
Punjab Gramin Bank is the largest regional rural bank in the state, having 284 branches across 13 districts with over 20 lakh clients