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Amalgamation of RRBs: Prathama UP Gramin Bank Officers Federation Urges Reconsideration of Sponsor Bank
The Prathama UP Gramin Bank Officers’ Federation has voiced concerns over Bank of Baroda's proposed role as sponsor bank for Uttar Pradesh RRBs. They cite operational challenges and staff welfare issues. It has given a call advocating Prathama UP Gramin support.
Author: Saurav Kumar
Published: November 16, 2024
The Prathama UP Gramin Bank Officers Federation (PUPGBOF) has raised serious concerns over the proposed sponsorship of the proposed amalgamation of the Regional Rural Banks (RRBs) in Uttar Pradesh under Bank of Baroda (BoB). In a letter dated November 12, 2024, addressed to the Union Finance Minister, the federation highlighted several disparities between Bank of Baroda (BoB) and Punjab National Bank (PNB), advocating for PNB as the more suitable sponsor for the upcoming RRB in the state.
Comparative Analysis Between PNB and BoB
All India Regional Rural Bank Officers Federation (AIRRBOF) affiliated Prathama UP Gramin Bank Officers Federation letter stated, “Over the last five years post-consolidation, Prathama UP Gramin Bank (PUPGB), sponsored by PNB, has consistently outperformed Baroda UP Gramin Bank (BUPGB), sponsored by BoB, with a business growth of 48.19% against 39.39%. Additionally, PUPGB posted a total net profit of ₹941.39 crore, far exceeding BUPB’s ₹187.09 crore. PUPGB also boasts a higher proportion of digitally active customers by 15%.”
Further, the federation provided a detailed comparison, showcasing PUPGB’s superior performance on key metrics like credit-deposit (CD) ratio (75.21% vs. 48.56%), return on assets (1.36% vs. 0.65%), and cost-to-income ratio (59.93% vs. 76.94%).
Operational and Staff Concerns
The federation also highlighted significant operational and staff-related issues under BoB’s sponsorship. It criticised BoB for outsourcing studies to identify rural branches for closure, contrasting this with PUPGB’s active branch expansion initiatives. “Instead of closing branches, RRBs should focus on enhancing financial inclusion by opening new branches to serve rural populations,” the letter stressed.
Regarding staff welfare, the letter noted, “BoB-sponsored Baroda UP Bank has stagnated in staff promotions and recruitment, leaving a large number of vacancies unfilled. In contrast, PUPGB, under PNB sponsorship, consistently provides promotions and inducts new staff through IBPS, ensuring employee growth and motivation.”
As a matter of fact, the DFS on November 4, 2024 proposed a road map for the amalgamation of RRBs to streamline operations of the ‘One State - One RRB’.
Call for Reconsideration
The federation made a strong appeal stating that, “The selection of Bank of Baroda as the sponsor for the proposed state RRB in Uttar Pradesh would be disastrous for its policies and mentally is completely against the development of its customer and its staff thus ultimately affecting the development of Uttar Pradesh negatively.”
The letter also requested the Finance Minister to name the proposed state RRB as Prathama Bank owing to the legacy of it being the first RRB that was established in the country.
In light of these concerns, the Prathama UP Gramin Bank Officers’ Federation’s appeal for a meeting with the Finance Minister has amplified the growing opposition to Bank of Baroda’s proposed sponsorship for the forthcoming RRB in Uttar Pradesh.