Instead, the unions are demanding the formation of a National Rural Regional Bank and linking it to a sponsor bank. The flag bearers of the association are of the view that there has always been a conflict of interest between the mainstream commercial banks and the RRBs sponsored by them.
To ensure banking facilities for farmers and artisans, there are 43 RRBs in India with a network of around 22,000 branches, mostly in hinterlands. These banks collectively provide employment to one lakh people.
The central government has 50% stake in each of the RRBs while their respective sponsor banks hold 35%. The remaining 15% in RRBs is conducted by the respective State Governments as per their areas of operation. For example, there are three RRBs within the limits of West Bengal and the state has a 15% stake in each of these banks.
The All India Regional Rural Bank Employees Union, a coordinating body of the National Association of RRB Officers and the National Association of RRB Employees, said dropping the central government’s share would eventually lead to privatization and hence they are opposing it.