NEWS – Karnataka to Have One Regional Rural Bank (RRB) from May 1, 2025

HIGHLIGHTS

Merger Details

• The Finance Ministry has announced the merger of:
  • Karnataka Vikas Grameena Bank (KVGB)
  • Karnataka Gramin Bank (KGB)
• The merged entity will be named Karnataka Grameena Bank.
• It will be headquartered in Ballari.
• Canara Bank will sponsor the merged bank.

Purpose of the Merger

• Part of the Centre’s ‘One State, One RRB’ policy.
• Aimed at:
  • Operational efficiency
  • Cost rationalisation

Wider Amalgamation Plan

• The Department of Financial Services (DFS) has approved amalgamation of 26 RRBs.
• Current RRBs: 43 in 26 states and 2 union territories (UTs).
• Post-amalgamation: 28 RRBs in the same regions.
• The merged RRBs will have:
  • 22,000+ branches
  • Coverage across 700 districts

Karnataka Vikas Grameena Bank (KVGB)

• Headquarters: Dharwad
• Branch Network: 629
• Total Business: ₹30,748 crore
  • Deposits: ₹17,647 crore
  • Advances: ₹13,101 crore

Karnataka Gramin Bank (KGB)

• Headquarters: Ballari
• Branch Network: 1,122 across 19 districts (e.g., Bengaluru, Mysuru, Mandya, Ballari)
• Total Business (as of March 2024): ₹63,697 crore
  • Deposits: ₹34,462 crore
  • Advances: ₹29,235 crore
• Formed in 2019 via merger of:
  • Pragathi Krishna Gramin Bank (Canara Bank sponsored)
  • Kaveri Grameena Bank (SBI sponsored)

Sponsorship Structure

• Current Sponsors: Both RRBs are currently sponsored by Canara Bank.
• Post-merger: Canara Bank will continue to be the sponsor.

Ownership Pattern of RRBs

• Governed under RRBs Act, 1976.
• Ownership split:
  • Centre: 50%
  • Sponsor Bank: 35%
  • State Government: 15%