People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 26

June 28, 2009


Rural Banks Team Submit Proposals


ON June 10, a delegation of the All India Regional Rural Bank Employees Association (AIRRBEA), led by its general secretary Dilip Kumar Mukherjee, met the finance minister, Pranab Mukherjee, at New Delhi. The association urged the minister to consider the proposal for a National Rural Bank through the amalgamation of the regional rural banks (RRBs) at the state level, as an aex bank exclusively for rural credit. This was suggested by the Professor Vyas committee and also recommended by the parliament�s standing committee.

The association also urged the minister to resolve the long pending issue of parity of pension for the RRB staff. The minister has assured the delegation that he would take a positive view.

The association has drawn the minister�s attention to the proposal for opening up new branches at each block headquarter in the country with adequate manpower through recruitment and promotion, in order to ensure financial inclusion.

The delegation submitted the following proposals for consideration in the budget.

1) Extension of capital support to the extent of accumulated loss of some RRBs as one-time measure.

2) RRBs, being poor man�s bank at his doorstep, should be exempted from income tax.

3) Full autonomy to the RRB Board under the general guidelines issued by the government of India or the NABARD. Existing supervisory authority of NABARD for the RRBs and cooperatives should be retained and strengthened.

4) Payment of interest on the CRR by the RBI to the RRBs.

5) The ministry of finance mustadvise all the ministries of the central and state governments to  deposit their low cost or zero cost funds with the RRBs also,  particularly in case of the government  sponsored schemes being implemented by the RRBs. The RRBs must be treated as public sector  banks or nationalised banks for the purpose of government deposits and transactions. (INN)