Rural banks told to cut jobs, outsource ops

KOLKATA: The Narendra Modi government has directed regional rural banks to become slim by cutting jobs and outsource non-core functions such as IT maintenance, cash remittance and housekeeping.
The decision may not force RRBs to lay off people but these banks, which collectively employ around 80,000 at present, would need to downsize their future hiring plans by at least 10-12%.
The government told them to handle higher volume of business with a lesser number of employees in a core-banking environment backed by modern IT infrastructure.
The move is aimed at improving productivity and profitability of these banks.This is based on the recommendations of SK Mitra committee on HR policy for RRBs, which was set up three-years back but its suggestions were buried under the carpet by the UPA-II government. SK Mitra was then the executive director of National Bank for Agriculture & Rural Development.
The Modi government wants RRBs to follow the recommendations.The nation's banking system has 56 RRBs with 19,400 branches and a collective business volume of Rs 4.50 lakh crore. They lend primarily to small farmers and artisans. "The committee had suggested steps with a view to improve productivity in RRBs," Mitra told ET on Thursday .
"RRBs need to redeploy people and re-skill them according to the need. The future profile of RRB employees should match the requirement of modern banking," he said. RRB employees have decided to resist this move as they see this as being impractical given the nature of RRB business.