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DFS Unveils 'One State, One RRB' Road Map Amid Rising Discontent Over Sponsor Banks
The DFS has introduced the ‘One State, One RRB’ amalgamation plan, aiming to consolidate RRBs under fewer sponsor banks. However, concerns over Bank of Baroda's management practices spark employee resistance.
Author: Saurav Kumar
Published: November 5, 2024
In a significant move aimed at enhancing efficiency within Regional Rural Banks (RRBs), the Department of Financial Services (DFS) under the Ministry of Finance has released a proposal outlining the planned amalgamation of several RRBs. This initiative is expected to streamline operations of the ‘One State - One RRB’ by consolidating RRBs under fewer sponsor banks. However, the proposal has met with resistance, particularly toward Bank of Baroda as a prospective sponsor, with employees voicing strong concerns over the bank's management approach and its impact on working conditions.
A paragraph from the DFS letter dated November 4, 2024 states, “Given the rural expansion ofRRBs and agro-climatic/geographical ethos and in order to retain the USP of RRBs viz. closeness to communities, it is the need to embark on further consolidation of RRBs towards the goal of 'One State-One RRB' so as to derive the benefits of scale efficiency and cost rationalisation. Keeping this in view, a road map has been prepared in consultation with NABARD for further consolidation of RRBs (Phase IV Amalgamation), which will bring down the number of RRBs to 28 from 43 at present.”
Proposed Amalgamation Structure
The DFS has proposed specific changes to the current structure of RRBs, aligning certain banks under a single sponsor institution. Below is a summary of the proposed amalgamation
The AIRRBEA leadership has expressed support for the DFS decision to release a roadmap for the amalgamation of RRBs.
Dispute Over Sponsor Bank led Regional Managers
Amid the structural changes for streamlining operations, Bank of Baroda’s name as proposed sponsor bank in Uttar Pradesh has created uproar among the employees of Baroda UP Bank (BUPB).
Speaking on the condition of anonymity, a BUPB employee told Kanal, “Baroda UP Bank has numerous capable officers at the Scale 4 level, yet 25 of its 30 regions are managed by Regional Managers (RMs) from Bank of Baroda. These RMs have imposed a culture of bonded labour leading to work pressure, aggressive cross-selling, verbal abuse, and even mental harassment. With such conditions, the proposal of Bank of Baroda as a sponsor bank in UP is unacceptable and will face strong opposition.”
In recent months, Baroda UP Bank has witnessed intense protests over staff shortages, an issue employees attribute to delays and neglect from the sponsor bank. Controversies surrounding Regional Managers have further fueled discontent, with multiple reports of corrupt practices, misbehaviour, and extreme work demands. In a notable incident in 2023, the Ballia Regional Manager was recorded verbally abusing a staff member, stating, “tum bandhwa majdoor ho, bank tumhe tankhwa deti hai” (You are a bonded labourer, and the bank pays your salary).
The proposed amalgamation marks a transformative period for RRBs, intended to tackle the longstanding challenges of rural banking and lay the foundation for a stronger, more sustainable future. However, as opposition mounts against certain sponsor banks, the DFS proposal faces heightened scrutiny. The outcome of this amalgamation plan now rests with policymakers who will need to carefully consider employee concerns and regional dynamics.