RRBs post record ₹10,176 crore profit in FY26

Regional Rural Banks’ record profit: what happened?

Regional Rural Banks were meant to bring banking to villages, but for years many were weak and loss-making. Mergers under “One State-One RRB” cut their number to 28 in 2025. The first full year after that shows record profit and cleaner books.

• RRBs opened over 54.98 lakh new PMJDY accounts in FY 2025-26.
• They met all targets and sub-targets under Priority Sector Lending.
• Their combined business now exceeds that of a few individual public sector banks.
• The Secretary, DFS asked RRBs to adopt modern technology and sponsor banks to strengthen their IT.

How were RRBs consolidated?

• Phase I (2005-2010): 196 to 82 RRBs; Phase II (2012-14): 82 to 56; Phase III: 56 to 43 by March 2021.
• Phase IV under “One State-One RRB”: 43 to 28 with effect from 1 May 2025.
• A NABARD study found that past mergers improved viability and financial performance.

Why does Regional Rural Banks’ record profit matter?

• Rural credit: A higher CD ratio means more rural deposits lent back locally.
• Inclusion: 54.98 lakh new Jan Dhan accounts in a year.

What can Prelims ask on Regional Rural Banks’ record profit?

• RRBs: 28 after Phase IV merger (1 May 2025), “One State-One RRB”.
• FY 2025-26: record net profit ₹10,176 crore; GNPA 5.3%; CD ratio 75.2%.