Karnataka gets unified rural bank as KVGB and Karnataka Grameena Bank merge

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Dharwad: Karnataka now has a single unified rural bank. Karnataka Vikas Grameena Bank (KVGB Bank), headquartered in Dharwad, and Karnataka Grameena Bank, headquartered in Bellary, have merged. The new Karnataka Grameena Bank commenced operations on Thursday, May 1.

Following the central government's 'One State, One Rural Bank' policy, the state now has a single rural bank. The new bank’s headquarters will be in Bellary.

The merged bank will remain government-owned, with the central government holding a 50% stake, the state government 15%, and Canara Bank 35%. The new Karnataka Grameena Bank will serve the entire state. With 1,751 branches and a turnover of (35%) retaining their stakes. The new Karnataka Grameena Bank will serve the entire state. With 1,751 branches and a turnover of ₹1,04,851 crore, it becomes the second-largest rural bank in the country.

Srikant M. Bandiwad, an agricultural graduate with 31 years of banking experience and former chairman of KVGB Bank, will lead the new Karnataka Grameena Bank.

KVGB Bank previously operated in 9 districts with 629 branches and a turnover of ₹38,714 crore. Karnataka Grameena Bank, headquartered in Ballari, served 22 districts with 1,122 branches and a turnover of ₹66,137 crore.

Establishment of rural banks in 1975

The central government established rural banks in 1975 to focus on rural development. At that time, there were 196 rural banks across the country, including 13 in Karnataka. In 2005, to strengthen these institutions, the government began the process of consolidation. As a result, there are now 43 rural banks operating nationwide, including the former KVGB Bank.

“Being the second-largest government-owned rural bank, customers will receive even better service,” said Srikant M. Bandiwad, Chairman of Karnataka Grameena Bank.