Ministry of Finance Announces Amalgamation of Regional Rural Banks in Telangana [Read Notification]

The Ministry of Finance, through its Notification No. S.O. 600(E) dated February 3, 2025, announced the amalgamation of Telangana Grameena Bank and the Telangana-based operations of Andhra Pradesh Grameena Vikas Bank into a single Regional Rural Bank ( RRB ). The new entity will be called Telangana Grameena Bank and will operate under the sponsorship of the State Bank of India ( SBI ), with its head office in Hyderabad.

The decision follows the bifurcation of Andhra Pradesh in 2014, which necessitated a restructuring of banking operations within the restructuring of the Andhra Pradesh State Reorganisation Act, 2014, the Central Government had earlier reorganized the central governments through notifications S.O. 2718(E) and S.O. 2719on October 20, 2014, (E) on October 20, 2014.

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The government constituted a Working Group on September 26, 2022, to oversee the division of assets and liabilities between Andhra Pradesh and Telangana to implement the bifurcation effectively. The group submitted its report to the National Bank for Agriculture and Rural Development (NABARD) on March 28, 2023.

Following consultations with stakeholders, including the Governments of Andhra Pradesh and Telangana, NABARD, and SBI, the final scheme for bifurcation was approved on November 13, 2024, with a directive to complete the entire process by December 31, 2024. The amalgamation has officially come into effect from January 1, 2025.

Key Provisions of the Amalgamation

1. Formation of a Single Regional Rural Bank: Telangana Grameena Bank and the Telangana-based operations of Andhra Pradesh Grameena Vikas Bank have been merged to create a single RRB named Telangana Grameena Bank. The new bank will operate under SBI's sponsorship with its headquarters in Hyderabad.
2. Financial Structure: The authorized capital of the new entity is set at Rs. 2,000 crores, divided into 200 crore fully paid shares of Rs. 10 each. The subscribed share capital of the new bank will be equal to the combined capital of the two former banks.
3. Shareholding Pattern: Central Government shares Rs. 28.64 crores, State Government shares Rs. 8.59 crores, Sponsor Bank ( SBI ) shares Rs. 20.05 crores

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1. Transfer of Assets and Liabilities: All assets, liabilities, reserves, and obligations of the transferor banks will be transferred to the new Telangana Grameena Bank. This includes all movable and immovable properties, cash reserves, investments, books of accounts, contracts, and legal obligations. Any pending lawsuits, contracts, or agreements of the former banks will now be applicable to the new bank.
2. Operational Guidelines: All deposit accounts (savings, current, fixed deposits, etc.) of customers will be transferred to the new bank without any disruption. The new entity will continue to serve customers across the combined operational areas. NABARD will oversee the operational aspects and human resource management under guidelines issued on November 13, 2024.
3. Employee Transition and Deployment: All employees from both banks will be absorbed into the new entity. The new Telangana Grameena Bank will have the authority to post and deploy staff across its operational areas.

The government has assured that there will be no disruption in banking services, and all customer accounts, deposits, and transactions will continue seamlessly under the new bank.

Implementation

• January 1, 2025 – The merger officially comes into effect.
• December 31, 2024 – Deadline for NABARD to complete the transition process.
• Ongoing – NABARD's Empowered Committee will oversee any challenges in the transition.

To Read the full text of the Order CLICK HERE

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