From a grim position, the RRBs, established in 1975 to serve as poor man's banks and had come to be regarded as white elephants with plummeting recoveries, were now recording improved performance with their deposits getting doubled from Rs 9,000 crore in 1994 to Rs 18,000 crore last year.

While all the 196 RRBs took advantage of the financial restructuring and deregulations, introduced in 1994, the performance of 49 RRBs in terms of increasing productivity, deposits and profitability was particularly striking and significant, according to a study conducted by the city-based reasearch and consultancy group `Cosmode'.

The study was commissioned by the Swiss Development Corporation which hadfunded the ODI (Organisation Development Intervention) programme aimed at improving the financial health of these banks. The Cosmode, headed by former principal of the Administrative Staff College of India here, Dharni P Sinha, was asked to identify factors that led to distinctive performance of 49 RRBs. Apart from doubling their deposits and advances, the RRBs improved their productivity from Rs 19 lakh per employee to Rs 21 lakh per employee during the four years, the study pointed out. The creditable turnaround was possible due to a series of measures including increased employee participation, systematic customer contact and introduction of new products suited for rural markets like farmer's credit card and occupational loans, it said.The study, involving on-site exercise by researchers who worked with stratified samples of 12 RRBs at a time comprising 600 RRB employees, customers and executives from promoter banks, revealed that there was a cause and effect relationship between organisation developmentintervention (ODI) and several parameters of performance improvement in these banks. The impact of ODI was reflected in the use of innovative methods to improve recovery performance by introducing regular contact programmes for borrowers and educating them on the importance of creditworthiness for securing future assistance, the study said.

A significant finding of the study was that the RRBs had successfully tackled the menace of money lenders in tribal areas and facilitated development of local entrepreneurs through innovation in products, services and systems development. ``Though RRB employees were greatly agitated because of lack of implementation of national tribunal award, the ODI helped them understand that until the RRBs turned around, their aspirations could not be met,'' the study said. The most significant impact of restructured RRBs has been on the employees who were now multi-skilled, supportive to each other in the bank and responsive to customers, the study said.