Government asked regional rural banks (RRBs) to introduce revised pay structure for their employees on par with PSU banks from November 1, 2007, which will cost them Rs 791 crore on arrears payment and plunge more of them into losses.
The additional cost on payment of arrears will bring down the total profits of the RRBs from Rs 2,374 crores during 2009-10.
This is likely to lead to more RRBs going into losses against only three loss making RRBs at present. Yet the Government is committed towards fulfilling its obligation of giving equal pay scales corresponding to those of nationalized banks to the RRB employees," Mr. Pranab Mjukherjee, Finance Minister said.
Currently, the country has 82 RRBs with over 68,000 employees.
The Finance Minister also asked 49 RRBs regional Rural Banks (RRBs), which have more than five per cent of non-performing assets, to bring down their bad debts below below 5 per cent by this year itself.
Stressing on their role towards financial inclusion, he called upon RRBs to speed up their activities to expand their branches on platform of Core Banking Solutions.
Mukherjee asked them to use new technology including mobile banking vans, tele-banking to provide banking services to entire population of the country, especially in the rural areas.
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