<h1>Government Rejects National Rural Bank Proposal; Consolidates Regional Rural Banks for Efficiency and Credit Flow.</h1> The government considered establishing a National Rural Bank of India following recommendations from the Parliamentary Standing Committee on Finance. However, the proposal for consolidating Regional Rural Banks (RRBs) under a national entity was not favored. Instead, the government initiated structural consolidation of RRBs, reducing their number from 196 to 45 through amalgamations between 2004 and 2019. This consolidation aims to enhance efficiency, productivity, and financial health, while increasing credit flow to rural areas. Recapitalization and capacity-building efforts are supported by NABARD, which also provides policy support and grievance redressal mechanisms for RRBs.