The Indian government’s “One State, One Regional Rural Bank” policy has led to the merger of two regional banks in Jammu and Kashmir, J&K Grameen Bank (JKGB) and Ellaquai Dehati Bank (EDB), into a single entity called Jammu and Kashmir Grameen Bank. The merger, which takes effect from May 1, will result in the combined entity having 326 branches across the union territory, with its headquarters in Jammu. Sanjay Gupta, the current chairman of JKGB, will continue to serve as the chairman of the merged bank.
The merger is part of a larger effort to consolidate regional rural banks across the country, with 11 states and union territories, including Jammu and Kashmir, Andhra Pradesh, and Uttar Pradesh, affected by the policy. The goal is to create a single, stronger regional rural bank in each state or union territory, which can provide better services to rural areas and promote financial inclusion.
The Jammu and Kashmir Grameen Bank will be sponsored by Jammu and Kashmir Bank (JK Bank), which previously sponsored JKGB, while EDB was sponsored by State Bank of India. The merged bank will have increased assets and capital, allowing it to function like other nationalized banks and expand its area of operation. The bank’s branches will be located across the union territory, with 82 branches in the Kashmir valley and 28 in Jammu.
The merger is seen as a positive development, with officials believing that it will lead to better services and increased financial inclusion in rural areas. The Regional Rural Banks Act of 1976, which established the regional rural banks, was amended in 2015 to allow these banks to raise capital from sources other than the central government, state governments, and sponsor banks.
The merger of JKGB and EDB is not the first in Jammu and Kashmir, as Kamraz Rural Bank, which was sponsored by JK Bank, was previously merged with Grameen Bank. The merged bank will continue to focus on providing credit and other facilities to small farmers, agricultural laborers, and artisans in rural areas, promoting financial independence and development in the region.