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Amalgamation of RRBs: AIRRBEA Recommends Sponsor Bank Changes in Key States
The All India Regional Rural Bank Employees Association (AIRRBEA) has submitted recommendations on sponsor bank selections in the DFS roadmap for RRB amalgamation, addressing specific concerns in states like Jammu & Kashmir, Maharashtra, and Odisha. The union seeks resolution for the best interest of the RRBs.
Author: Saurav Kumar
Published: November 6, 2024
In light of the recent release of the Department of Financial Services (DFS) roadmap for Phase IV amalgamation of Regional Rural Banks (RRBs), the All India Regional Rural Bank Employees Association (AIRRBEA) has presented a detailed submission. The submission offers specific recommendations highlighting the concerns regarding the selection of sponsor banks for RRBs in Jammu & Kashmir, Maharashtra, and Odisha.
The letter dated November 5, 2024 to the Additional Secretary, DFS aimed at ensuring the long-term viability and effectiveness of RRBs in serving rural communities.
A section of the letter stated, “We welcome and sincerely appreciate the Government of India's decision on the Phase IV amalgamation in 12 states culminating into ‘One State One RRB’ for which the AIRRBEA has been pursuing for a long period for betterment of the function and operation of RRBs and to benefit of the rural masses of the country.”
Responding to the amalgamation proposal, AIRRBEA President C. Rajeevan told Kanal, “Our recommendations to the DFS regarding sponsor banks align with the larger vision of establishing the National Rural Bank of India (NRBI). While amalgamation is expected to fortify RRBs, our suggestions highlight immediate concerns related to sponsor banks, with the best interests of the respective RRBs in four states and one union territory.”
Recommendations on Sponsor Banks for Key States
The AIRRBEA has suggested revisiting the selection of sponsor banks to align with RRB goals in certain states. Below is a summary of AIRRBEA’s recommendations for each state:
| State | Current RRBs | Proposed Sponsor Bank | AIRRBEA's Recommendation |
| Jammu & Kashmir | Jammu & Kashmir Grameen Bank, Ellaquai Dehati Bank | J&K Bank | State Bank of India |
| Maharashtra | Maharashtra Gramin Bank, Vidarbha Konkan Gramin Bank | Bank of Maharashtra | Bank of India |
| Odisha | Odisha Gramya Bank, Utkal Grameen Bank | Indian Overseas Bank | State Bank of India |
| Puducherry | Puduvai Bharathiar Grama Bank | Indian Bank | Merge with Tamil Nadu Grama Bank |
Key Concerns Raised by AIRRBEA
1. Jammu & Kashmir: AIRRBEA has expressed concerns over the proposal to have Jammu & Kashmir Bank as the sponsor for the newly amalgamated entity in Jammu & Kashmir. Being a smaller private entity with limited national exposure, the association believes it may not adequately support the RRB's rural mandate. They advocate for State Bank of India as the preferred sponsor due to its strong nationwide presence and experience in rural banking.
2. Maharashtra: In Maharashtra, the current proposal suggests that Bank of Maharashtra will be the sponsor. However, AIRRBEA recommends Bank of India due to its larger, more extensive network and ability to provide the necessary resources for effective rural banking.
3. Odisha: Indian Overseas Bank is listed as the sponsor for Odisha’s merged RRBs, which AIRRBEA opposes, citing concerns over the bank's past management practices and alleged employee grievances. AIRRBEA suggests that State Bank of India would better serve the RRB’s needs, given its vast experience in managing RRBs and rural-centric operations.
4. Puducherry: In Puducherry, AIRRBEA proposes merging Puduvai Bharathiar Grama Bank with Tamil Nadu Grama Bank, given both RRBs are currently sponsored by Indian Bank. This consolidation could improve operational efficiency, aligning two culturally and linguistically similar regions under one entity.
The AIRRBEA’s recommendations seek to ensure that RRBs retain their local focus while benefiting from the support and resources of well-established sponsor banks. The DFS is expected to review these suggestions before finalising the roadmap, aiming to address employee and operational concerns.