Excelsior Correspondent
JAMMU, June 27: All India Bank Officers’ Confederation and All India Bank Employees Association, have written to the Union Finance Ministry seeking merger of Regional Rural Banks (RRBs) with their respective sponsor banks for ensuring overall efficiency and viability of the banking sector.
“The major challenge for improving operational efficiency of RRBs stems from the fact that the RRBs are under dual control of NABARD and sponsor banks. It is imperative that for ensuring desired level of operational efficiency, duality of control over the RRBs should end and they should be brought under operational and regulatory framework as being practiced by the sponsored banks and the same can be ensured by the merger of these two entities,” reads the letter.
The letter claims that the merger of RRBs with their sponsor banks will update the skill of RRB employees to modern banking practices and effectively address the issues of staff shortages in both RRBs and the sponsored banks. Such integration in HR will also be seamless as the salary structures and other perquisites enjoyed by the officers and employees of RRBs are broadly same and they are also exposed to the work culture of their respective sponsor banks for all the operational support extended over the last 45 years, it added.
Moreover, further reads the letter, the proactive step of merging RRBs with their respective sponsor banks will facilitate enhanced supervision, governance and accountability ensuring greater sustainability of the entire banking sector.
“The multifarious advantages that follow from merger of the RRBs with their sponsor banks make us unequivocal in placing our demand for a complete merger of all the 43 RRBs, which will ensure a complete transformation of the rural economy by combining the financial strength of the sponsor bank with the rural outreach of the RRBs arresting the trend of declining growth in CASA deposits and more efficient credit delivery system for the benefit of the entire rural population,” reads the letter.
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