Rural banks to be merged in TS, AP

Their number will come down from five to three

May 10, 2019 12:00 am | Updated 07:22 am IST - HYDERABAD

Hyderabad, Telangana, 09-05-2019: Andhra Pradesh Grameena Vikas Bank Chairman K. Praveen Kumar Addressing the media in Hyderabad. Photo: K.V.S. Giri / The Hindu

Hyderabad, Telangana, 09-05-2019: Andhra Pradesh Grameena Vikas Bank Chairman K. Praveen Kumar Addressing the media in Hyderabad. Photo: K.V.S. Giri / The Hindu

A merger of regional rural banks (RRBs) in Telangana and Andhra Pradesh, as part of a nationwide exercise by the Centre aimed at consolidation and making such entities stronger will happen this fiscal.

The move will bring down the number of RRBs in the two States from five to three – one for Telangana and two for Andhra Pradesh.

For the Warangal-headquartered Andhra Pradesh Grameena Vikas Bank (APGVB), that accounts for over one-third of the total business of the five entities, it will mean morphing into Telangana Grameena Bank and staking its claim to be one of the two merged entities in AP.

Given the pace at which RRBs elsewhere are being merged, the consolidation in the two States could well happen in six-nine months, said APGVB chairman K. Praveen Kumar.

Responding to queries, during an interaction here on Thursday, he said since the sponsor bank of the two RRBs in Telangana was the same – State Bank of India –, a merger would mean a change in the name board for the APGVB. It, however, was not expected to be so simple in Andhra Pradesh. While the Syndicate Bank-sponsored Andhra Pragathi Grameena Bank is likely to continue, the second RRB will emerge from a three-way merger of APGVB, Saptagiri Grameena Bank and Chaitanya Godavari Grameena Bank.

In Andhra Pradesh, Mr. Praveen Kumar said, the APGVB was well positioned to take in the other two banks by virtue of its financial health, branch network and staff strength. APGVB is present in three districts of AP – Visakhapatnam, Vizianagaram and Srikakulam – through a network of 291 branches and in the erstwhile five districts of Medak, Nalgonda, Mahabubnagar, Warangal and Khammam of Telangana through 484 branches.

On the benefits, he said APGVB was better placed to replicate its success in other areas. It was “easier for me and will be beneficial for the customers,” he said, pointing out that the net worth of APGVB at nearly ₹2,400 crore was the highest among all RRBs.

Sharing details of performance of the APGVB during 2018-19, he said a provision of ₹838 crore towards a pension liability had resulted in the net profit of the bank declining to ₹112.04 crore as opposed to the previous fiscal’s ₹503.01 crore. Under the pension scheme proposed by the Central government, all retired employees of RRBs would get pension with effect from April 2018. Some 1,300 retired employees of APGVB were likely to benefit, he added.

Total business of APGVB last fiscal stood at ₹32,714 crore, an increase of 14.19% over the previous year’s ₹28,650.33 crore.

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