The unified Karnataka Grameena Bank will be established on May 1

Sreekant M. Bhandiwad, who so far is KVG Bank, will become the chairman of the unified Karnataka Grameena Bank (KGB), which will be established on May 1, 2025. Image source: Special arrangement

According to the central government’s notice under its “One State, One RRB” policy, it will be established on May 1, the unified Karnataka Gramena Bank (KGB) and its headquarters in Balari.

In 1975, when the central government first established the Regional Rural Banks in 1975, there were 196 RRBs in India, including 13 in Karnataka. To further strengthen these institutions, the government began the first phase of the merger in 2005 and authorized the Bank of Gramena. Due to this and subsequent mergers, the number of RRBs in the country dropped to 43, leaving only two in Karnataka.

Karnataka Vikas Grameenabank (KVGB) is headquartered in Dharwad and has 629 branches in 9 regions. The bank’s business turnover is Rs 38,714 crore.

Ballari-based Karnataka Grameena Bank (kgb) has 1,122 branches in 22 regions. Its turnover is Rs 661,37 crore.

The two banks have been merged to form a unified Karnataka Gramena Bank. The newly formed Karnataka Gremena Bank will continue to own government ownership, with the central government holding 50% stake, the state government 15% and the Canara Bank (sponsored merchant bank) 35%. The bank’s services will now extend in Karnataka, making it the second largest regional rural bank in India with 1,751 branches and a turnover of Rs 1,04,851 crore.

Sreekant M. Bhandiwad, who led KVGB so far, will now lead the unified KGB.

Mr Bhandiwad said the two Grameena Banks played a key role in bringing institutional credit into the rural economy. The unified RRB will continue to do the same with renewed power and greater security. He said the merger would strengthen the country’s RRB.

He called on clients and the public to continue to work together. He said that as the largest government-owned rural bank, the new entity is committed to providing better and more effective services to its large customer base.