The regional rural bank (RRB) employees are going to observe a one-day strike on September 27 opposing the government’s plan to divest its 50% share in each of the rural banks in favor of their respective sponsor banks.
The employee unions are instead demanding the formation of a national rural regional bank and delinking it with any sponsor bank. The union flag bearers are of the view that there have always been conflicts of interest between mainstream commercial banks and the RRBs they sponsor.
India has 43 RRBs with a network of around 22,000 branches mostly in the hinterlands to ensure banking facilities for farmers and artisans. These banks collectively employ one lakh people.
The central government holds 50% in each of the RRBs while their respective sponsor banks hold 35%. The balance of 15% in RRBs is held by the respective state governments according to their areas of operation. For example, West Bengal has three RRBs within its boundary and the state holds 15% in each of these banks.
The All India Regional Rural Bank Employees Association, a coordinating body of the National Federation of RRB Officers & the National Federation of RRB Employees, said that relinquishing central government share would eventually lead to privatization and that’s why they are opposing it.
Source: Economic Times