The centre has started the consolidation process of merger of Regional Rural Banks along with the Public Sector Lenders and it intends to cut down the tally to 36 from the existing 56.
To initiation this, the government has begun consultations with state governments as they are one of the sponsors of these banks in the country, says a Finance Ministry Official.
Further, banks besides the sponsors are also chalking out the roadmap of the proposed merger in the said, said the official.
The development is followed by the recently proposed mergers of Bank of Baroda, Vijaya Bank and Dena Bank for creating another global size bank.
This amalgamation is proposed for ensuring better scale-efficiency, escalated productivity, the better the financial health of Regional Rural Banks. It will further help in improving Financial Inclusion and greater credit flow to rural areas, the official said.
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