In protest against the Centre’s plan for amalgamation of three public sector banks (PSBs), bank unions on Tuesday took out rallies and held sit-ins in several towns in the State.
C.D. Josson, State convener of the United Forum of Bank Unions (UFBU), an umbrella forum of nine unions, told The Hindu that bank staff at 75 centres across the State, including district headquarters towns and cities, held sit-ins and organised demonstrations as a token protest. The UFBU would, at a meeting of its national leadership on September 29, chalk out an action plan against the amalgamation.
As part of its objective of reducing the number of pubic sector banks, the Centre on Monday decided to amalgamate Bank of Baroda, Dena Bank, and Vijaya Bank.
The decision is said to be in line with the M. Narasimham Committee report of 1991 which had, among others, recommended that public sector banks be restructured so that there would be three to four big banks and eight to ten banks with nationwide presence.
The merger of five associate banks and the Mahila Bank with the State Bank of India was part of this strategy.
‘Move to reduce stake’
However, bank unions smell foul in the decision and suspect the Centre’s move to substantially cut down its stake in the public sector banks and let crony capitalists and multinational companies share the spoils.
C.H. Venkatachalam, general secretary, All-India Bank Employees Association, which is a member of the UFBU, in a press note claimed that the amalgamation was aimed at diverting people’s attention from the alarming bad loans situation in the public sector banks.
At a time when recovery of bad loans and criminally prosecuting the culprits should be the top priority, the government was employing the ‘camouflage’ of the merger of the three banks to divert attention.
He noted that the 21 banks in the public sector had to suffer a net loss of ₹85,000 crore in the past financial year in spite of their making an operating profit of ₹1.55 trillion. This was because of the provisioning of ₹2.70 trillion towards bad loans acquired by these banks.
A. Raghavan, general secretary of the State Banks Staff Union, Kerala Circle, told The Hindu that there was nothing to prove that mergers and amalgamations would make the Indian banks stronger.
He claimed that following the merger of five associate banks and the Mahila Bank with the SBI in April last year, the combined bad loans had only increased.
In Kerala alone, around 200 bank branches, mainly of SBT, were ‘rationalised’ and shut down.
Shutdown of branches
In his view, the proposed amalgamation would only lead to shut down of hundreds of branches, reduce the career prospects of the staff, and shrink banking services instead of expanding them.
He also noted that the complex process of amalgamation would take a long time.
