Disparity in Loan Quantum and Interest Rates for APGVB Staff Compared to SBI Staff Fuels Discontent

The Andhra Pradesh Grameena Vikas Bank Officers' Association (APGVBOA) and Employees' Union (APGVBEU) have voiced strong opposition to the appointment of auditors deputed from the sponsor bank, State Bank of India (SBI), as well as the long-pending revision of loans, allowances, and other financial benefits for staff.

In the letter dated September 19, 2024, the associations expressed concern on the persisting disparity in loan terms and interest rates between APGVB staff and SBI staff. As per the letter, the associations a month ago requested the management to take necessary steps to stop deputing SBI staff as auditors to branches, to avert large-scale demotivation to RRB staff. However, necessary action is awaited. While we have been demanding that even General Managers of our bank should be RRB staff, deputing SBI staff to audit the branches is a retrograde step and derogatory towards our bank’s auditors.

Image: Excerpt of the letter written by APGVBOA, APGVBEU to the bank Chairman on disparity in loan rates and SBI auditors

Disparity in Loan Quantum and Interest Rates

The disparity between the quantum of staff loans and the interest rates charged to APGVB employees, compared to those of SBI staff, is at the core of the issue. 

1. Housing Loans:

• Sub-Staff in RRBs can avail a housing loan of Rs. 30 lakh at an interest rate of 6.95% per annum, while in SBI, they are eligible for Rs. 60 lakh at 5% per annum.
• Clerical staff in RRBs are eligible for Rs. 40 lakh, whereas their SBI counterparts can access up to Rs. 80 lakh at the same reduced rate.
• Officers in RRBs are significantly disadvantaged, with Scale I-III officers eligible for Rs. 60 lakh compared to Rs. 120 lakh for the same positions in SBI.

1. Car Loans: Car loans for RRB sub-staff are non-existent, while SBI sub-staff can avail up to Rs. 7 lakh. Clerical staff in RRBs can only avail Rs. 6.5 lakh, whereas SBI offers Rs. 15 lakh.
2. Personal Loans: Personal loans are another area of concern, with sub-staff in RRBs with more than three years of service eligible for Rs. 1 lakh, compared to Rs. 5 lakh in SBI. This disparity continues across various levels, with RRB officers having a cap of Rs. 11 lakh after ten years of service, while their SBI counterparts can avail up to Rs. 15 lakh after just three years of uninterrupted service.

The associations provided a comparative chart that highlights this glaring inequity. 

Image: Comparative chart on loan and interest rate differentiating RRB staff and Sponsor Bank employee

Impact on Morale 

An officer of APGVB, speaking anonymously, told Kanal, “The unequal loan provisions severely affect the financial well-being of APGVB staff. It is incredibly disheartening that the loan limits for a Scale IV or V officer in RRBs are equivalent to those of an attendant in the sponsor bank. This glaring disparity urgently needs to be addressed and resolved.”

In their letter to the Chairman, the associations have called for immediate revisions to these loan provisions to bring parity with SBI staff and relieve the financial pressure faced by APGVB employees. They also expressed dissatisfaction with auditors being deputed from SBI, seeing this as an additional imposition that undermines the autonomy of APGVB. 

On September 4, AIRRBEA affiliated unions in SBI sponsored RRBs registered their protest against the same set of disparities. 

The associations in APGVB have also remarked to escalate their protests if these long-standing demands, including pay revisions and loan adjustments, are not addressed in a timely manner.