All-India Nabard Employees Association (AINBEA) has demanded National Bank for Agriculture and Rural Development (Nabard) must strengthen regulatory and supervisory control over 28 newly merged Regional Rural Banks (RRBs) in 26 states and two UTs.

Nabard has nurtured RRBs all these years, said Rana Mitra, General Secretary, AINBEA. “Let their public sector character be maintained and enhanced further in service of rural poor,” he told businessline. Mitra recalled how All-India Regional Rural Bank Employees Association had fought for long for merger of RRBs.

Monitoring committees set up 

Centre notified the amalgamation on April 7 in line with ‘One State, One RRB’ concept. To oversee the process, Department of Financial Services has constituted a state-level monitoring committees and a national level project monitoring committee.

State-level committees have been advised to develop a state action plan and finalise it before April 18. They will convene fortnightly meetings to monitor progress of amalgamation and resolve issues, if any, sources said.

SOPs, data migration plan 

These committees will also finalise standard operating procedures for transferee and transferor RRBs and core banking solution (CBS) partners as also prepare a comprehensive data migration plan; assess issues and design address same; and ensure minimum system down time during migration process. 

The national-level committee is required to resolve issues arising out of amalgamation; issue suitable guidelines/instructions to state-level committee; and review progress of the state-level action plan.  

Trade union role

Mitra said agrarian crisis has underscored urgent need for strengthening rural banking. RRBs must reclaim role as instruments of financial inclusion and rural empowerment. Working along with trade unions, they can ensure a future rooted in equity.

“As we reflect on challenges before us, let us remember that trade unions are more than just protectors of worker rights – they are also custodians of humanity’s collective spirit,” he said.

Systemic challenges

Originally designed to empower rural communities, RRBs and Nabard have been grappling with systemic challenges. Nabard’s capacity to support RRBs and cooperatives is undermined due to withdrawal of low-cost funds from Reserve Bank. 

If Central Bank were to reinstate its contributions to Nabard, more than ₹22,000–24,000 crore could be directed toward rural development annually at lower interest rates, Mitra pointed out. 

“West Bengal exemplifies weakening of RRBs and cooperatives. RRBs here have disbursed only 9 per cent of agricultural credit in 2022-23, compared to 12 per cent nationally,” he added. 

Published on April 11, 2025