New Delhi, Dec 07: Merging of regional rural banks and setting up of an apex authority for the RRBS are likely to be delayed as the discussions among the sponsoring banks, RBI and National Bank for Agriculture and Rural Development are yet to reach any conclusive decision. "Discussions are currently being held with Indian Banks' Association, Reserve Bank and Nabard to take a decision on it and the discussions at this stage are inconclusive," official sources told newspersons on the proposal for merger and setting up of an apex institution.


Of the 196 RRBS, as many as 40 were incurring a total loss of around rs 215 crore and the accumulated losses in the system amounted to over Rs 2,750 crore in 2002-03.

Sources said that the losses were mainly due to low capital base, poor quality of lending portfolio, poor recovery levels, mounting overdues, rising management costs and slender margins.

The loss making branches of RRBS had been allowed to be converted into satellite mobile offices "without impairing the performance of service area obligations", they said.

In view of 'multitude' of problems, they said, a centre appointed working group, chaired by M V S Chalapati Rao, had recommended a comprehensive restructuring of RRBS apart from suggesting changes in capital structure and ownership pattern.

However, employees, owing allegiance to various parties, had been long demanding the scrapping of the Rao Committee report, which according to them was 'anti-labour'.

Bureau Report