Post-Merger Transformation of Regional Rural Banks in Odisha: Challenges, Opportunities, and Financial Inclusion Outcomes
Year: 2026
Type: article
Study design: Observational Study
Abstract: The merger of Regional Rural Banks (RRBs) in India was initiated with the objective to improve efficiency and sustainability, as well as to include the rural population into this process. In Odisha, the merger of several regional rural banks has caused revolutionary changes in the scenario of rural banking through a combination of administration, branch network, and technology. This research paper discusses the problems arising post merger, the future of Regional Rural Banks in Odisha, as well as the impact of mergers of RRB on financial inclusion in Odisha. The research has been carried out on the basis of both primary and secondary data that have been gathered from 320 respondents including banks officers, rural customers, self-help groups, and small entrepreneurs in 12 districts of Odisha. The results show that after merging RRBs, there was a 28.4% growth in rural bank account penetration, a 31.7% increase in agricultural loan issuance, and a 24.6% increment in digital transactions from 2021 to 2025. Post-merger problems have also been recognized, such as resistance from employees (42.8%), technological integration problems (37.5%), increases in non-performing assets (18.3%), and difficulties in rationalizing branches in distant areas (26.9%). Moreover, a positive relationship is indicated by the regression analysis, which exhibits a correlation coefficient (r) of 0.71 between RRB mergers and banking sector expansion as well as financial inclusion measures like PMJDY bank account coverage, rural credit availability, and women's involvement in banking. Furthermore, regression analysis shows that technological modernization and optimization of branch networks have a significant impact on financial inclusion results with an adjusted R² of 0.68. Despite the existence of some operational problems after RRB mergers, the amalgamation of RRBs in Odisha has made significant contributions to improving rural banking efficiency and inclusive economic development. Some recommendations have been provided for future research to enhance the implementation of financial inclusion through technological advancements, capacity-building of employees, localized financial literacy activities, and risk management systems.
Authors: Sudhansu Panda, Biswo Mishra
Institution: Utkal University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W7166356038