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Prathama UP Gramin Bank Union Urges Reconsideration of Bank of Baroda as Sponsor for RRB Amalgamation
The Prathama UP Gramin Bank Officers’ Association 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 PNB’s proven support.
Author: Saurav Kumar
Published: November 11, 2024
Prathama UP Gramin Bank, represented by its Prathama UP Gramin Bank Officers’ Association, has voiced strong reservations against the designation of Bank of Baroda as the sponsor bank for the proposed amalgamation of RRBs in Uttar Pradesh. In a letter to the Additional Secretary of the Department of Financial Services (DFS), Prathama UP Gramin Bank (PUPB) presented seven key arguments, highlighting operational and welfare concerns, and compared existing benefits under Punjab National Bank’s (PNB) sponsorship.
A simmering discontent is growing among the three RRBs in Uttar Pradesh—Aryavart Bank, Baroda UP Bank, and Prathama UP Gramin Bank regarding Bank of Baroda’s role as their sponsor bank. Together, these banks have a combined workforce of approximately 18,000 employees.
The letter dated November 7, 2024 emphasised, “Policies affecting the sponsor bank should be determined with careful consideration to avoid adverse impacts on employees, customers, and the institution’s stability.”
Summary of Key Concerns from Prathama UP Gramin Bank
1. Branch Expansion: Unlike PNB-sponsored Prathama UP Gramin Bank, which opened 11 new branches in FY 2023-24, neither Baroda UP Bank nor Aryavart Bank, both sponsored by Bank of Baroda, initiated any new branch openings. Instead, Bank of Baroda proposed the closure of 268 rural and semi-urban branches based on a survey, contrasting with the government’s goal of financial inclusion.
2. Staff Recruitment: Baroda UP Bank had a recruitment freeze for three years, leading to staff shortages and violating the spirit of government employment initiatives. This stands in contrast to PNB’s consistent hiring policies under Prathama UP Gramin Bank.
3. Regional Manager Appointments: The majority (25 out of 30) of Baroda UP Bank’s Regional Managers are on deputation from Bank of Baroda, even though there is sufficient local talent. This, the letter claims, fosters a “feudal work culture” and incurs additional costs, impacting the bank’s profitability.
4. Employee Attrition: Baroda UP Bank’s staff count fell by 5.4% over the last fiscal year, reflecting poor employee retention. Comparatively, Prathama UP Gramin Bank has lower attrition rates, credited to more favourable working conditions.
5. Credit-to-Deposit (C:D) Ratio: Prathama UP Gramin Bank reported a higher C:D ratio (72.4%) than Baroda UP Bank (46%), indicating better utilisation of deposits for rural development.
6. Loan Disbursement: On average, Prathama UP Gramin Bank has disbursed ₹21 crore per branch in loans, significantly higher than Baroda UP Bank’s ₹15 crore, underscoring its greater financial outreach.
7. Sponsor Bank Location: With Bank of Baroda’s headquarters in Vadodara (1,100 km from Lucknow), the association highlighted concerns over logistical efficiency. In comparison, PNB's Delhi headquarters is closer (500 km), facilitating better administrative control.
A member of the Prathama UP Gramin Bank Officers’ Association told Kanal, “The proposed sponsorship by Bank of Baroda in Uttar Pradesh is facing strong opposition due to significant issues like the ongoing freeze on staff recruitment and the heavy-handed approach of certain Regional Managers. Our appeal to endorse Punjab National Bank as the sponsor bank is expected to gain traction in the coming days.”
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’.
Comparative Benefits Under PNB Sponsorship
The letter also highlighted differences in employee benefits across banks, favouring the PNB-sponsored Prathama UP Gramin Bank. For instance, housing loan limits for officers under PNB range from ₹50 lakh to ₹150 lakh, depending on rank, surpassing those under Bank of Baroda. Additionally, PNB-sponsored staff enjoy higher festival advances, fuel allowances, and other welfare perks, enhancing employee morale and retention.
The association has urged the DFS to reconsider appointing PNB as the sponsor bank for the proposed RRB amalgamation in Uttar Pradesh, highlighting PNB’s strong record in financial inclusion, employee welfare, and operational efficiency, aligning closely with the government’s vision for RRBs.