Unions in SBI-Sponsored RRBs Demand Parity in Staff Loans and Interest Rates

The Coordination Committee of Unions in State Bank of India (SBI) Sponsored Regional Rural Banks (RRBs) has raised a formal request to the Chairman of SBI, Mr. Challa Sreenivasulu Setty on issues that remain unresolved, leading to growing frustration among RRB employees.

The letter from AIRRBEA-affiliated Unions, dated September 4, 2024, highlights the glaring disparities in staff loans, interest rates, and the lack of reimbursement for monthly petrol bills compared to the sponsor bank. It also addresses concerns over the need for autonomous auditing and the inefficiency of current IT services within RRBs.

Image: Coordination Committee of Unions in SBI Sponsored RRBs

There are a total of 14 SBI-sponsored Regional Rural Banks (RRBs), which include: Arunachal Pradesh Rural Bank, Chhattisgarh Rajya Gramin Bank, Saurashtra Gramin Bank, Ellaqui Dehati Bank, Jharkhand Rajya Gramin Bank, Madhyanchal Gramin Bank, Meghalaya Rural Bank, Mizoram Rural Bank, Nagaland Rural Bank, Utkal Grameen Bank, Rajasthan Marudhara Gramin Bank, Andhra Pradesh Grameena Vikas Bank, Telangana Grameen Bank, and Uttarakhand Gramin Bank.

A comparative chart along with the letter reveals significant disparities in the quantum of staff loans and the rate of interest charged. For instance, a Scale IV officer in an RRB is eligible for a housing loan of Rs. 60 lakh, which is the same amount granted to a sub-staff member in SBI. In contrast, a Scale IV officer in SBI is eligible for a housing loan of Rs. 150 lakh. The disparity in interest rates further exacerbates the issue, with RRB employees being charged a higher rate of interest than their SBI counterparts.

Discrepancies in Loan Facilities:

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.
2. 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 (combined with two-wheeler loans), whereas SBI offers Rs. 15 lakh.
3. 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.

Image: Comparative chart of staff loans and the rate of interest

Deputation of Officers from Sponsor Bank for Audit Works

The letter also addresses the issue of deputing officers from sponsor banks for audit work within RRBs. While intended to ensure compliance, the Coordination Committee argues that this practice undermines the autonomy of RRBs. Officers from sponsor banks may not fully understand the specific challenges faced by RRBs, leading to audits that overlook local realities and operational constraints. The frequent involvement of sponsor bank officers adds administrative burdens and creates a hierarchy that can disrupt the smooth functioning of RRBs.

Poor Technology and Substandard IT Services

Another significant concern raised in the letter is the substandard technology and IT services in RRBs, provided by the current service provider. Unions allege that due to outdated software, frequent technical glitches, and inadequate IT support, RRBs are unable to compete in the market and are losing valuable customers to other banks. The committee calls for an urgent upgrade of IT systems and services to help RRBs meet the growing demands of the banking sector and better serve their rural customers.

The AIRRBEA unions in SBI-sponsored RRBs are demanding equity and justice for RRB employees. Addressing these disparities, they argue, would not only boost employee morale but also improve the overall working environment across SBI-sponsored RRBs.