Bank Unions demand merger of Gramin Banks (RRBs) with Sponsor Banks

Bank employees want Regional Rural Banks (RRBs) to join their sponsor banks to make the banking system more efficient. They believe that competition between public sector banks and RRBs wastes money because they offer the same services. This means that people in rural areas miss out on modern banking technology. By merging RRBs with the sponsor banks, everyone will have access to the same banking services, which will help the rural economy grow and support the government’s plan for a strong Indian economy.

The All India Bank Officers’ Confederation and the All India Bank Employees Association, which represent over 600,000 bank employees, sent a joint letter to the Finance Minister, Nirmala Sitharaman, explaining their concerns. RRBs were created specifically for rural areas and were funded by the Indian government, state governments, and the main banks under the RRB Act, 1976. Currently, there are 43 RRBs supported by 12 commercial banks, with around 22,000 branches across 702 districts. These banks serve around 300 million deposit accounts and 30 million loan accounts. Almost all public sector banks, except Punjab & Sind Bank, support one or more RRBs. The J & K Bank is the only private bank that supports an RRB.

The letter also mentioned that merging RRBs with their sponsor banks would help RRB employees learn modern banking practices and address staff shortages in both RRBs and the sponsor banks. The integration of human resources would be smooth because the salary structures and benefits for RRB officers and employees are similar to those in the sponsor banks. RRB employees are also familiar with the work culture of their sponsor banks because they have received operational support for the past 45 years.

The joint letter emphasized that merging RRBs with their sponsor banks would improve supervision, governance, and accountability, making the entire banking system more sustainable.