GENERAL7 Sept 2026
C. Rangarajan flags fewer regional rural banks as ‘a step in the wrong direction’; urges RBI to incentivise SFBs
Former RBI Governor C. Rangarajan has called the merging of Regional Rural Banks a wrong step. He said it erases their local character and could push them into universal banks. At Equitas SFB's anniversary, he urged RBI to incentivise small finance banks, saying just 11 won't meet the country's unmet credit needs. Government has consolidated RRBs to 28 under One State-One RRB since May 1, 2025.
Key Statutory Highlights
- C. Rangarajan criticised the consolidation of Regional Rural Banks, calling it a step in the wrong direction.
- He warned that merging RRBs loses their local and regional character and may lead to their merger with universal banks.
- He urged the RBI to incentivise small finance banks, noting that 11 such banks cannot meet unmet credit needs.
Actionable Advice for Taxpayers / Founders:If your business borrows from a regional rural bank or small finance bank, keep track of RBI policy on incentivising small finance banks, as it may affect credit availability.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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