Opposing the recently announced mega merger of public sector banks, the United Forum of Bank Unions (UFBU), an umbrella body of nine banking industry trade unions, will stage a demonstration before the Parliament on September 20. According to the union leaders, the move will only benefit the corporates at the cost of the public sector units.
On August 30, the Narendra Modi government announced the biggest bank consolidation plan by merging 10 public sector banks into four bigger banks. As a result of this plan, the total number of public sector banks in the country will be reduced to 12 from 27 in 2017.
The move, however, triggered massive protest from lakhs of bank employees and officers which had led to a nation-wide protest earlier, on August 31.
The main fear of the trade union with the idea of merging public sector banks is that it will eventually lead to privatisation – a move that would undermine national sovereignty by carrying forward the dominance of international finance capital.
In a statement reiterating similar emotions, All India Bank Officers Association (AIBOC) stated that the merging of public banks will eventually lead to selling of these entities to “unscrupulous” corporate entities and will “pave the way for non-banking financial companies and fintech companies to make inroads into areas dominated by Public Sector Banks (PSBs)”.
The trade unions contend that the banking industry is currently going through the crisis; however, a strong disagreement lies over the reasons behind the crisis.
In his Deccan Herald article, Devidas Tuljapurkar, joint secretary of All India Bank Employees Association (AIBEA) writes that the move will absolve the large corporates, who are “the root cause of the present crisis in banking”.
According to him, this will only shift the focus in resolving the banking crisis – from recovering the non-performing assets (NPAs) from corporates, “which is the urgent need of the day”, to issues related to branch rationalisation and manpower integration.
Consolidation of PSBs will in no way help banks to come out of the crisis, he added.
The UFBU has also decided to submit a memorandum to Finance Minster Nirmala Sitharamana detailing their apprehensions regarding the move.