Regional rural bank staff seek delink from sponsored banks

The All India Regional Rural Bank Employees Association has demanded the delinking of the regional rural banks (RRBs) from their sponsored banks so that they could be more effective in rural areas.

Addressing a press conference, S Venkateshwar Reddy, secretary of the All India Rural Bank Employees Association, said: "The association welcomes the recommendations of the Bankers Committee to amalgamate all the RRBs to form six zonal rural banks," adding, "These zonal banks must be headed by an apex body to oversee their functioning."

Reddy said that these zonal branches must be made responsible and accountable for the needs of the rural areas.

"In view of the reluctance of the commercial banks and the collapse of the cooperative banks, the RRBs are the only alternative before the government, in pursuing accelerated credit to the rural areas," Reddy said.

He said that the sponsored banks looked only at profits and not the social commitments, which was the main reason for the setting up of the RRBs in 1975. The association has welcomed the policies with regard to development of the rural and agriculture sectors by the central as well as the state government.

Reddy said that these policies should not merely remain as announcements but should be properly implemented.

"When vehicle loans are given without any interest, why cannot tractor loans be given under the same conditions," he questioned. According to him, revenue flow trends had reversed and at present it was from the rural areas to urban areas.

"The crop insurance scheme should also be modified to cover the medical needs of the family members apart from shielding farmers against remunerative prices and input costs over and above the technical committee rates," Reddy said.

According to him, almost 80 per cent of rural credit is financed by the private money lenders.

Reddy said that the credit deposit ratio of the RRBs in the rural areas was 42 per cent as compared to the 40 per cent of the commercial banks.

He also said that the recovery rate of the RRBs was better than the commercial banks at around 78 per cent as compared to 48 per cent by the commercial banks.