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dynamitenews.com
New Delhi / 26 March 2016. State Bank of India (SBI) sponsored five regional rural banks (RRBs) in the Northeast are soon to merge.
Arunachal Pradesh Rural Bank, Meghalaya Rural Bank, Mizoram Rural Bank, Nagaland Rural Bank and Langpi Dehangi Rural Bank (based in Assam) are the five RRBs set to be merged, according to sources.
SBI recently made the merger decision, asking the RRBs to seek board approvals before the merger. The proposal of the Merger needs approval by the State and Center government. In each of the five RRBs, SBI holds35 per cent stake, the Centre 50 per cent, and the respective state government 15 per cent.
The merged organisation would have a deposit base of Rs 3,578 crore, with advances of Rs 1,736 crore. On March 31, 2015 the Total Net Profit of the five banks was Rs 44.52 crore. Of the five RRBs, only Nagaland Rural Bank reported losses in the last financial year.
In the first stage of amalgamation, the RBBs are merged within a state on the basis of their sponsor banks. In the second phase, mergers are initiated across sponsor banks within a state.
The number of the RRBs was reduced from 196 to 64 as on March 31, 2013, and further to 56 at present, with a network of 20,059 branches covering 644 districts, as a result of earlier amalgamations.
Among the five banks to be merged, the largest bank in term of outstanding loans is Mizoram Rural Bank with outstanding loan of Rs 203.52 crore as of December 2015. Nagaland Rural Bank is the smallest bank with dues of about Rs 5.52 crore.
