Does DFS Order on RRB Non-compliance Validate Nationwide Employees Unrest?

The Regional Rural Banks (RRBs) have been facing a wave of protests across multiple states, with employees and officers demanding urgent reforms, fair treatment, and the resolution of long-standing issues. From Sarva Haryana Gramin Bank and Utkal Grameen Bank to Tripura Gramin Bank, Uttar Bihar Gramin Bank and Mizoram Rural Bank, employees have taken to the streets over management’s continued failure to address grievances, leaving them feeling ignored and overburdened.

Image: Protest and dharna by employees of Sarva Haryana Gramin Bank and Tripura Gramin Bank

The concerns raised by protesting employees have now found an evident link to the recent directive from the Department of Financial Services (DFS), which, in its March 4, 2025, letter, criticized RRBs for failing to comply with government policies, resulting in indiscipline, widespread grievances, and unrest. While DFS flagged these issues at a systemic level, the protests highlight the ground reality of employee dissatisfaction due to broken commitments, delayed settlements, and worsening working conditions.

Image: DFS directive to RRBs on failing to comply orders

Nationwide Agitation Over Policy Failures and Employee Rights

All India Regional Rural Bank Employees Association (AIRRBEA) Secretary General S. Venkateshwar Reddy hailed the DFS order as a landmark directive, holding RRB management accountable for defying government mandates. 

Speaking to Kanal, he stated, “The primary cause of unrest across RRBs is their persistent non-compliance with government orders and court judgments on crucial issues like parity with sponsor banks, minimum wages, and adequate manpower. Moreover, the excessive influence of sponsor banks has only worsened the challenges faced by RRBs.”

The unrest among RRB employees stems from multiple unresolved concerns, including:

• Non-implementation of 12th Bipartite Settlement and 9th Joint Note despite their applicability to RRBs.
• Severe staff shortages forcing officers to perform clerical tasks, hampering customer service.
• Intense cross-selling of third party products over core banking services.
• Unilateral tax deductions on perquisites, reducing take-home salaries and causing financial hardship.
• Non-transparent transfer policies and lack of union consultation.
• Lack of wage parity and benefits at par with sponsor banks, leaving employees feeling exploited.
• Infrastructural issues affecting working conditions, from outdated furniture to lack of hygiene facilities.

Image: Employees of Uttar Bihar Gramin Bank during protest against unresolved demands

Unions in Sarva Haryana Gramin Bank (SHGB), Uttar Bihar Gramin Bank (UBGB), Utkal Grameen Bank (UGB), Karnataka Vikas Grameena Bank (KVGB), Tripura Gramin Bank (TGB), Mizoram Rural Bank (MRB), and Prathama UP Gramin Bank (PUPGB) have staged protests and submitted charters of demands, urging their managements to act. However, delays, backtracking, and lack of serious negotiations have only fuelled the crisis.

Image: Employees of Prathama UP Gramin Bank at dharna demanding resolution of tax deduction on perquisites 

Employees argue that while RRBs are expected to drive financial inclusion in rural India, they are being denied basic rights, fair wages, and workplace stability. The situation has reached a tipping point, with employees now boycotting extra campaigns, refusing to work beyond official hours, and launching hunger strikes to make their voices heard.

With banking operations in rural India at a crucial juncture, the Finance Ministry and DFS must step in to enforce compliance and prevent further disruptions. If urgent corrective measures are not taken, the ongoing agitation may escalate into a full-scale industry-wide crisis, jeopardising not only employee welfare but also the future of Regional Rural Banks.