The creation of regional rural banks (RRB_s) in 1975 to cater exclusively to the credit needs of rural poor like small and marginal farmers, rural artisans and agricultural laborers was one such initiative

The Institution of RRB_s was created to meet the excess demand for institutional credit in the rural areas, particularly among the economically and socially marginalized section although the co-operative banks and the commercial banks had reasonable records in terms geographical coverage and disbursement of credit. The Internal working group of the Reserve Bank of India (RBI) suggested that merger and amalgamation of Regional Rural Banks (RRBs) may help in improving their health and viability, even as it sought to bring in new banks both public and private as sponsors of the merged RRBs. This paper studies whether the process of amalgamation was beneficial or not.