Making Regional Rural Banks Market Efficient : A Study on Amalgamation Effect

When major commercial Banks are now looking towards the emerging markets of rural India, Regional Rural Banks (RRBs), which were set-up specifically for the rural sector, have had a bitter experience on the very same market. Almost all RRBs of India suffered huge loss, plagued by low morale of its employees. For many years, RRB's performance and service quality both remained a cause of concern. To strengthen the functioning of these RRBs, many reform measures, including amalgamation, have been initiated in the recent past. As considerable time and effort have been given on this reforms-measure, time has come to assess whether ‘amalgamation' of RRBs has helped in improving its working-efficiency and the service-quality, provided by the banks.The present paper studies the evolution and growth of RRBs and then tries to find, how demographic variables influence the service-quality in rural banking. The study is made on the newly formed Odisha Gramya Bank (OGB), made by amalgamation of existing RRBs, those operated in 13 districts of Odisha. Both primary and secondary data are used for the study. The primary data collected for the purpose of analysis of service quality parameters. Popular statistical tools have been used for analysis. This study is expected to help the RRBs in understanding expectations of the ever demanding customers of emerging markets