Regional Rural Banks strengthen rural credit and financial inclusion in FY 2025-26
New Delhi, August 18, 2026: Regional Rural Banks (RRBs) continued to strengthen their role in promoting rural economic development and financial inclusion during FY 2025-26 by expanding credit delivery and maintaining a strong focus on Priority Sector Lending (PSL).
The gross outstanding loans of RRBs increased by 10.3 per cent, from Rs 5,24,163 crore in FY 2024-25 to Rs 5,78,349 crore in FY 2025-26. Their performance under the Reserve Bank of India’s Priority Sector Lending framework also remained strong. Against the prescribed overall PSL target of 75 per cent, the average achievement reached 91.7 per cent of Adjusted Net Bank Credit (ANBC). Almost all RRBs achieved the overall PSL target.
Agriculture and allied activities remained the largest component of the RRBs’ loan portfolio, accounting for 77 per cent of total priority sector lending, with outstanding loans of around Rs 3.78 lakh crore. Agricultural credit supported crop cultivation, allied agricultural activities and investment in the rural economy.
Credit to the Micro, Small and Medium Enterprises (MSME) sector stood at Rs 66,978 crore, accounting for 13.6 per cent of total PSL. More than 95 per cent of MSME lending was directed towards micro enterprises, supporting first-generation entrepreneurs, self-employed persons, artisans and small business units in rural and semi-urban areas.
The services sector accounted for the largest share of MSME lending, followed by manufacturing enterprises and Khadi and Village Industries. The lending support provided by RRBs is helping strengthen rural entrepreneurship and employment generation.
RRBs extended Rs 3.49 lakh crore in credit to weaker sections, reaffirming their commitment to financial inclusion and equitable access to institutional credit. Loans for housing, education, renewable energy and social infrastructure also contributed to inclusive and sustainable development.
These initiatives supported human capital development, asset creation for households, adoption of clean energy and development of local infrastructure.
Overall, the performance of RRBs during FY 2025-26 reflects continued expansion of rural credit, strong alignment with national development priorities and sustained support for farmers, micro enterprises and other underserved sections.
RRBs continue to remain an important pillar in strengthening financial inclusion, improving rural livelihoods and promoting inclusive and balanced economic growth.
