Government Plans RRB Listings in FY27, 2 Banks to Lead IPO Drive

As per The Economic Times, the government has told public sector banks to start preparing their sponsored Regional Rural Banks for stock market listing in FY27.  

Banks have been asked to set out 5-year plans for the merged RRBs and help those that are profitable to complete the formal requirements needed before listing. 

Shortlist Under Review 

At least 2 RRBs are expected to be taken to the market in the 1st half of FY27. Uttar Pradesh Gramin Bank is one of the banks being considered.  

As per the news report, sponsor banks were asked earlier this year to submit names of RRBs that meet the financial norms for a public issue. 

Consolidation and Technology Work 

The listings follow the recent consolidation carried out under the ‘One State, One RRB’ plan, which reduced the number of RRBs from 48 to 23. The finance ministry has said this has helped strengthen the financial base of the combined entities.  

Technology upgrades across the banks were also taken up, and officials say the integration work is almost finished. 

Eligibility Norms for Listing 

RRBs must meet the guidelines set out in 2002 to qualify for listing. These include a net worth of at least ₹300 crore in each of the past 3 years.  

Banks also need a minimum pre-tax operating profit of ₹15 crore in at least three of the previous 5 years, and a return on equity of at least 10% in 3 out of the last 5 years. Based on these standards, 5 to 7 RRBs may be eligible. 

Ownership and Recent Performance 

RRBs follow a 3-way ownership structure: 50% by the Centre, 15% by state governments and 35% by sponsor banks.  

For FY25, RRBs reported a combined profit of ₹6,825 crore, down from ₹7,571 crore in FY24. The government said the fall was mainly due to the implementation of a retrospective pension scheme and payments related to computer increment liabilities. 

Read More: India Raises Small Company Thresholds to ₹10 Crore Capital and ₹100 Crore Turnover! 

Conclusion 

With the consolidation complete and financial checks underway, the first set of RRBs is expected to reach the market in early FY27. 

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