LDRB, AGVB to be merged with sponsored banks in Assam, plan to reduce RRBs from 56 to 36

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HT Bureau

DIPHU, Feb 19: Two Regional Rural Banks (RRBs) will be amalgamated in Assam under the Centre’s new policy of amalgamation of RRBs to bring down the number of RRBs to 36 from 56.

According to the new policy, the Assam Gramin Vikas Bank (AGVB) and Langpi Dihangi Rural Bank (LDRB) will be amalgamated, sources here said on Monday.

According to sources, the AGVB will be amalgamated with its sponsored bank United Bank of India (UBI), while LDRB will be amalgamated with its sponsored bank State Bank of India (SBI).

LDRB is mainly concentrated in the three hill districts of Karbi Anglong, West Karbi Anglong and Dima Hasao and parts of Nagaon district.

The department of financial services under the ministry of finance had issued a letter to UBI and SBI, on February 14 for amalgamation of RRBs in the state.

Many people of the three hill districts are of the opinion that the amalgamation of LDRB will have an impact on the farmers of the three hill districts. After the amalgamation, the name of LDRB will be erased with the name of the sponsored bank. The LDRB has its centre of operation and branches in the three hill districts. There is also fear of closing down of LDRB branches located in remote and extreme places in the three districts.

Moreover, the UBI is a weak bank making losses, whereas the SBI is a strong and stable bank in the country. Many people are of the opinion that SBI should be a sponsoring bank for the RRBs in the state.

A road map for the same has been prepared and it envisages the amalgamation of RRBs at the state-level. About 33 RRBs, currently spread across 11 states, will be brought together into fourteen banks. The exercise is being done in consultation with NABARD.

The road map envisages that there will be some give and take among various sponsor banks in different States. SBI, for instance, will take over six RRBs, which are currently under other sponsor banks, under its fold, while shedding four RRBs to other banks.

The amalgamation process is being done ostensibly to enable RRBs cut overheads, improve their capital and use technology, besides helping them draw better scale-efficiency, higher productivity, improved financial inclusion and greater credit flow to rural areas.

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