The Hidden Cost of Amalgamation

When the State Bank of India (SBI) was the sponsor bank for Purvanchal Gramin Bank, it hollowed out the institution quietly, much like a termite. Outwardly, we appeared strong and polished; internally, we were being eroded. Many of us recognised this over time but remained complacent out of temporary comfort.

Each morning brought the same instruction from the top: “Today is SBI Life Login Day — every branch must achieve ₹5 lakh in business.” 

Gradually, recovery efforts waned as staff discovered that selling a single insurance policy could absolve them of accountability, while “holiday marking” kept loans from slipping into NPA status. This created a dangerous complacency — loan customers became lax, and employees were lured by short-term incentives. Over ₹1 billion of branch resources were channelled into SBI Life policies, a move that would later haunt the institution. SBI officers and select employees enjoyed foreign trips to Singapore, cash incentives of ₹50,000–₹60,000, and perks like mobile reimbursements and entertainment allowances, even as the financial burden of inevitable defaults fell squarely on our rural bank. Beneath this façade of success, the RRB silently bled — weakened by policies that favoured appearances over accountability.

SBI further weaponised insurance sales as a means of control and subjugation. Promotions were tied to achieving MDRT status, while punishments and disciplinary actions awaited those who failed to meet insurance targets. These unwritten rules became the yardstick of career progression, pushing employees to sell policies recklessly in the hope of securing one of the few available promotions. Recruitment remained minimal, and performance was judged not by banking competence but by sales figures.

Yet, amid this exploitative environment, SBI demonstrated foresight in one area — provisioning. Anticipating that the nationwide struggle for pension parity would eventually bear fruit, it maintained adequate reserves to safeguard financial stability. Another saving grace was the strong presence of the All India Regional Rural Bank Employees Association (AIRRBEA), whose persistent efforts ensured that SBI could not fully dominate the institution. Few sponsor bank officers were posted to regional or head offices, sparing staff from deeper exploitation. Still, the damage ran deep — while outwardly functional, the RRB’s structural integrity had been eroded from within by years of parasitic practices.

The Shift to Bank of Baroda: Hope and Disillusionment

Then came the 2020 amalgamation of three banks into Baroda Uttar Pradesh Bank (Baroda UP Bank) — a development that initially inspired hope. Staff anticipated renewed recruitment, timely promotions, and relief from the burden of third-party sales. For a short while, these expectations seemed to materialise as new appointments and promotions were rolled out. But the optimism soon faded when sponsor bank officers began occupying most key positions at the head and regional offices, re-creating the very imbalance the merger was supposed to correct.

This vindicated the foresight of AIRRBEA’s long-standing struggle to repatriate sponsor bank officers from RRBs. Unfortunately, certain unions with ties to sponsor banks exploited their proximity to gain personal benefits while ignoring collective welfare. Worse, some even supported the idea of merging RRBs entirely into sponsor banks — effectively advocating the dismantling of the RRB system itself.

As staff unity weakened, management capitalised. Recruitments froze again, promotions were delayed, and workload intensified. Consultancy firms like Boston Consulting Group (BCG) were brought in to recommend “cost-cutting” measures, which included branch closures — an absurd suggestion from a company funded by our own income. It took strong organisational resistance to force the withdrawal of such anti-staff proposals.

For the Bank of Baroda, the amalgamation’s challenges were never insurmountable. Yet, lack of experience in handling a rural-focused entity and poor decision-making created chaos. Under pressure to boost business, the management resorted to arbitrary measures, curbing staff benefits and morale.

Reclaiming the Spirit of Rural Banking

In response, the Joint Forum of unions countered management’s authoritarian tendencies and compelled it to initiate fresh recruitment. However, persistent issues — from inefficient software systems to erratic policy implementation — continue to hurt customers. Service quality has suffered, leading many rural clients to drift away. The damage has been both reputational and operational.

The truth remains that just as tenants may come and go, the house must remain ours. The RRBs are that house — the enduring institution we must preserve, irrespective of which sponsor bank temporarily manages its affairs.

Under the visionary leadership of AIRRBEA and the guidance of our seniors, our path forward must put staff and institutional welfare at the centre. We must rise above regional and sponsor-based identities. Earlier, we were Purvanchal, Kashi, or Baroda; today, we are Uttar Pradesh Gramin Bank employees. But tomorrow, we must proudly call ourselves Gramin Bank employees — the custodians of rural finance in India.

If we reflect on our organisational journey, one truth stands out: our struggles, though widespread, have been fragmented. Our collective strength was diluted by regional boundaries and sponsor-bank divisions. But today, operating across 75 districts and managing the state’s largest rural banking network, we have the numerical and moral strength to present a united front.

We are now at a critical juncture. With a clear intention, honest leadership, and unwavering unity, we can ensure that our voices are not just heard, but respected.

[Disclaimer: The views expressed are of the author.]