Dynamics of Performance of Regional Rural Banks in the Post-Merger Era

Regional Rural Banks plays a crucial role in extending and lending agricultural and rural credit. Amalgamation and Recapitalisation are some measures taken by the Government of India to strengthen the Regional Rural Banks for playing greater role in agricultural and rural lending. The process of restructuring was initiated for improvement in their operations, ensure better managerial control and achieve economics of scale. A committee under the chairmanship A.V. Sardesai (2005) was formed on this issue of restructuring these Regional Rural Banks and to improve their operational viability.The committee had a view that , a change in the sponsor banks will bring change in work culture, efficiency and competitiveness which may in some cases improve the performance of the Regional Rural Banks.