Unified Karnataka Grameena Bank to come into existence

The Unified Karnataka Grameena Bank (KGB) came into existence on May 1, 2025, following the amalgamation of Karnataka Vikas Grameena Bank (KVGB) and Karnataka Grameena Bank (KGB).

This merger aligns with the ‘One State, One RRB’ policy aimed at consolidating Regional Rural Banks (RRBs) for better efficiency and service delivery.

Key Details: • Headquarters: Ballari, Karnataka • Business Turnover: ₹1,04,851 crore • Branches: 1,751 across Karnataka

• Ownership Structure

: Central Government: 50% State Government: 15% Canara Bank (Sponsor Bank): 35%

Leadership: • Chairman: Sreekant M. Bhandiwad, former head of KVGB

History:

 When the Central Government first established Regional Rural Banks (grameena banks) in 1975, 196 RRBs were functioning across India, including 13 in Karnataka.

To further strengthen these institutions, the government initiated the first phase of amalgamation in 2005 and empowered grameena banks. As a result of this and subsequent mergers, the number of RRBs in the country came down to 43, with only two remaining in Karnataka.

At present, The number of RRBs in India has decreased from 43 to 28 and with only one remaining in Karnataka.

About the ‘One State, One RRB’ policy The ‘One State, One RRB’ policy is a major banking reform introduced by the Ministry of Finance, Government of India, aimed at consolidating Regional Rural Banks (RRBs) within each state into a single entity.

This initiative is designed to streamline rural banking operations, enhance efficiency, reduce costs, and improve financial services across rural India.

• Sponsor Banks:

 Each unified RRB is backed by a single sponsor bank, eliminating competition among multiple banks within a state.