All India Regional Rural Bank Employees Association (AIRRBEA) members demanded at a meeting here that the National Rural Bank of India should be formed through the merger of all the RRBs.
"It is strongly apprehended that the ongoing process of consolidation through amalgamation of different RRBs in a particular commercial bank namely Sponsored bank, will leave almost all the constraints and difficulties unattended to. RRBs, bereft of their separate operational and attitudinal ethos, will be made clones of these sponsor banks," said D K Mukherjee, general secretary of AIRRBEA.
He said that sponsor bank-wise unified RRBs would would be simply converted into rural bank subsidiaries of these commercial banks.
According to Ratan Khasnobish, economist and professor of University of Calcutta, the main problem lies in the fact that the deposit mobilised in the rural areas are not coming back as investment.
"The deposits mobilised in the rural areas are moving out in the urban and semi-urban areas towards the high end activities like IT generating higher returns. RRBs can show the road ahead in this regard by channelising the investments into the rural areas, towards low end activities like agriculture which though generates lower return, but is the only answer to the food scarcity," he said.
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Khasnobish, who is also an advisor to the committee headed by Usha Thorat, Deputy Governor, RBI for the Lead Bank Scheme, called for a national policy on the channelising the flow of credit.
Speaking on the issue, T R Ramachandran, chairman of the Paschim Banga Gramin Bank, said there was urgent need for the consolidation of the RRBs into a single entity to counter the large banks.
"For banks big always means beautiful, and consolidation is the key to survive," he added.