Regional Rural Banks (RRBs) recorded strong growth in credit delivery during 2025-26, with their gross loans outstanding rising 10.3 per cent to ₹5.78 lakh crore, up from ₹5.24 lakh crore in the previous financial year, according to data released by the Ministry of Finance on Tuesday.
The performance highlights the continued role of RRBs in expanding institutional credit in rural areas, supporting agriculture, micro-enterprises and other underserved sections of the economy.
RRBs also maintained strong performance under the Reserve Bank of India’s Priority Sector Lending (PSL) framework. Their average achievement against the overall PSL target of 75 per cent of Adjusted Net Bank Credit (ANBC) stood at 91.7 per cent during FY2025-26. Almost all RRBs achieved the prescribed overall PSL target.
Agriculture remains the biggest beneficiary
Agriculture and allied activities continued to account for the largest share of RRBs’ priority-sector credit portfolio.
Outstanding credit to agriculture and allied activities stood at ₹3.78 lakh crore, accounting for 77 per cent of total PSL. Farm credit constituted nearly 98 per cent of agricultural lending, supporting crop cultivation, allied activities and investment in the rural economy.
The figures underline the continued importance of RRBs in providing institutional finance to farmers and strengthening rural economic activity.
MSME credit reaches ₹66,978 crore
RRBs also maintained a strong focus on micro, small and medium enterprises, with credit to the MSME sector reaching ₹66,978 crore, accounting for 13.6 per cent of total priority-sector lending.
More than 95 per cent of MSME lending was directed towards micro enterprises. This included financing for first-generation entrepreneurs, self-employed people, artisans and small business units in rural and semi-urban areas.
Within the MSME portfolio, the services sector accounted for the largest share, followed by manufacturing enterprises and Khadi and Village Industries.
The lending is expected to support rural entrepreneurship and employment generation while improving access to formal credit for small businesses.
₹3.49 lakh crore credit to weaker sections
RRBs extended ₹3.49 lakh crore in credit to weaker sections, reaffirming their focus on financial inclusion and equitable access to institutional finance.
Apart from agriculture and MSMEs, RRB lending also covered areas such as housing, education, renewable energy and social infrastructure. These segments contribute to household asset creation, human capital development, clean energy adoption and local infrastructure development.
RRBs strengthen role in rural economy
The overall performance of RRBs during FY2025-26 reflects sustained expansion in rural credit and continued alignment with national development priorities.
With agriculture accounting for the bulk of priority-sector lending and significant credit flowing to micro-enterprises and weaker sections, RRBs continue to serve as an important channel for institutional finance in rural and semi-urban areas.
The growth in lending and strong PSL performance reinforce the role of RRBs in promoting financial inclusion, strengthening rural livelihoods and supporting inclusive and balanced economic growth.
