The number of RRBs has shrunk from 43 to 28 to 28 to an amalgamation with effect from 1 May | Photocredit: Istockphoto
The National Bank for Agriculture and Rural Development (Nabard) offers a centralized digital credit platform for Regional National Banks (RRBs) to give them a lead when it comes to competing with non-bank financial companies and microfinancing institutions.
This digital infrastructure for end-to-end automation of credit delivery is being developed as part of strategic repositioning of these nichebanks as competing alternatives for the aforementioned lenders after the only state-of-one RRB policy of the government came into force on 1 May.
The number of RRBs has shrunk from 43 to 28 to 28 to and including from 1 May. This is done so that they can realize the benefits of scale efficiency and cost rationalization that passes through consolidation.
“The Centralized Digital Credit Infrastructure (CDCI) is designed to digitize, automate and streamline credit processing and management for different loan products, which considerably improves operational efficiency and transparency.
“It is expected that it will offer a more agile and efficient solution than the current loan students that are implemented in some RRBs. The CDCI is the target for rollout at the end of September 2025,” said Nabard’s last annual report.
The Apex Development Bank, which was founded in 1982 under a Parliament Act to promote sustainable and fair agriculture and rural development, intends to provide support to RRBs in designing innovative loan products to help them diversify their portfolios.
For example, it can support the home credits with standard guarantees and products from the first loss for the micro, small and medium-sized business sector.
RRBs were founded in 1975 under the provisions of a regulation announced on 26 September 1975 and followed by Regional Rural Banks ACT, 1976, with a view to developing the rural economy and a supplementary channel for the ‘cooperative credit structure’. They were driven to increase institutional credit for the national and agricultural sector
The contribution of the Indian government, the state government concerned and a bank (a bank of the public sector), which has sponsored the RRB, to the stock capital of RRBs, is 50 percent, 15 percent and 35 percent respectively.
The 28 RRBs are currently working through a network of 22,158 branches spread over 26 states and 3 trade union areas. About 92% of the RRB locations are in national or semi-urban areas, which underlines their vital role in deepening the financial inclusion.
At the end of March 2025, the aggregated deposits and the outstanding loan of the 43 RRBs increased by 8.2 percent on an annual basis (yej) to £ 7.13.790 crore and 12.1 percent to £ 5.26.829 crore respectively.
Published on September 11, 2025
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