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Regional Rural Banks Questioning Disparity, Demand Equal Treatment as Commercial Banks
Regional Rural Banks (RRBs) demand equal treatment as commercial banks following the 12th Bipartite Settlement, citing disparities in allowances, working conditions, and delayed benefits. Despite serving millions, RRBs face neglect and discrimination.

Author: Saurav Kumar
Published: April 11, 2024
In the wake of the 12th Bipartite Settlement (BPS) benefiting commercial banks, Regional Rural Banks (RRBs) decry the glaring disparities they face in comparison.
Despite the agreement, RRBs find themselves sidelined, devoid of the benefits and key policies extended to all public sector banks, including allowance disparities, staffing shortages, sponsor bank pressures in third-party product sales, and working conditions.
Allowance Discrepancies
A significant grievance among RRB employees is the disparity in allowances provided by sponsor banks, as outlined in the 2016 Department of Financial Services (DFS) circular.
These allowances, such as transport, halting, and transfer compensation, are crucial for RRB employees. However, the All India Regional Rural Bank Employees Association (AIRRBEA) alleges non-uniform implementation by sponsor banks, exacerbating the disparity.
Image: DFS circular on allowances to RRBs via Sponsor Banks
According to a senior RRB employee, sponsor banks are denying special pay for clerks, a benefit commonly available in commercial banks.
He added, “For instance, clerks in commercial banks receive ‘A’ allowance for sitting at the counter, ‘B’ allowance for dealing, and ‘C’ category allowance for joint custodian keys and handling lockers. In contrast, clerical cadres in RRBs, despite undertaking numerous duties including sitting at the counter, handling cash, and possessing joint custodian keys, receive meagre allowances on par with clerks of commercial banks.”
The implementation of allowances delegated to sponsor banks has been found lacking uniformity. This discrepancy has led to clashes between sponsor banks and RRBs. Consequently, AIRRBEA has been advocating for the elimination of allowance authorisation to sponsor banks to end allowance disparity.
AIRRBEA’s Secretary General, Venkateshwara Reddy, expressed concern over the allowance disparities, stating, “The stark allowance discrepancy, particularly among the clerical cadre, highlights how RRBs lag behind commercial banks.”
A retired AGM of the State Bank of India in Sambalpur, Odisha, asserted that clerks at commercial banks enjoy accelerated promotion based on merit. He highlighted RRBs' localised nature and limited technological advancements, suggesting public sector banks offer superior advancement opportunities.
Additionally, RRBs cater to around 40 crore predominantly rural customers across India, second only to the State Bank of India (SBI), which serves nearly 45 crore customers.
RRBs Face Discrimination in Working Conditions
An anonymous Utkal Grameen Bank employee penned an open letter to the Chairman of Utkal Grameen Bank (UGB), highlighting discrimination against RRBs compared to commercial banks. The letter raised concerns about the lack of welfare schemes for RRB employees despite consistent profitability. Additionally, it criticised the challenging working conditions at UGB, including excessive work pressure, understaffed branches, absence of air conditioning, and low-scale officers managing high-scale branches.
Image: Anonymous Banker’s Letter to Utkal Grameen Bank Chairman on RRBs working conditions
Delay in Implementing 12th BPS Benefits
Following the 12th Bipartite Settlement (BPS) agreement, the delayed revision of salaries and allowances has stirred unrest among Regional Rural Bank (RRB) personnel.
AIRRBEA has denounced the discriminatory delay in extending 12th BPS benefits to RRBs, demanding equal treatment with commercial banks.
Similarly, the All India Regional Rural Bank Officers’ Federation has urged the Prime Minister and DFS to promptly implement salary and allowance revisions post-12th BPS.
Government Neglects RRBs Financial Needs
While commercial banks receive steady government capital infusion, Regional Rural Banks (RRBs) are neglected. Despite the government allocating Rs. 3,10,997 crore for bank recapitalisation from 2016–17 to 2021–22, RRBs lack equivalent support.
Despite their impressive performance in FY 2022-23, RRBs like Utkal Grameen Bank and Uttarbanga Kshetriya Gramin Bank suffer severe staff shortage, contrary to S.K Mitra Committee recommendations for adequate staffing.
Although RRBs play a crucial role in financial inclusion with low NPAs and profits, they operate at a disadvantage compared to commercial banks. This disparity underscores the challenges faced by RRB employees in terms of working conditions, allowances, and delays in 12th BPS benefits.