The All India Regional Rural Bank Employees Association (AIRRBEA) has urged the finance minister Pranab Mukherjee to give more autonomy to the regional rural banks (RRB) to open branches in rural areas.
The association has urged the government to not to encourage “branchless banking” through the business correspondent model, for financial inclusion.
The issue was also discussed at a recent meeting of the finance minister with heads of public sector banks and chief ministers of several states, held in Patna recently, said Dilip Kumar Mukherjee, Secretary General, AIRRBEA.
The association has asked the government to have “National Common Software” for the rural credit system in the country, to be monitored by any national-level banking institution till the formation of a separate apex institution.
Also, the government should bear the loss, if any incurred by any RRB, for the initial five years for opening of branches in the terrorism-inflicted areas, backward and hilly areas, the association said in a statement to the finance ministry.
For the proper functioning of rural credit delivery mechanism, the association has asked for the amalgamation of RRBs to form a state-level RRB under “National Rural Bank” “to ensure unity of command and approach, cross subsidization taking the entire responsibility for rural, agricultural credit along with Cooperative Bank with the share holding of government of India, Nabard and the state government,” said Mukherjee.
It is to be noted, RRBs could expand around 750 branches in the programme for “branch expansion” in the last two years.
“The progress for branch expansion has been reduced and in certain cases, branch opening licences are pending for a long period,” he said.
Out of a total 31,479 rural bank branches in the country, RRBs constitute about 36.58 per cent of the rural branches.
