The amalgamation of regional rural banks is poorly planned
The high-handed way in which the Union government has gone about amalgamation of regional rural banks ignores all corporate governance norms
On 7 June, the Union ministry of finance despatched a letter to the chairmen/managing directors of sponsor banks. The letter indicated that the Union government, in consultation with the National Bank for Agriculture and Rural Development (Nabard), had decided to go ahead with phase III of the amalgamation of regional rural banks (RRBs). This will bring down the total number from 56 to 38 and ensure that most of the smaller states have only one RRB, while the larger might have two.