On Monday, October 14, bank employees across the nation held mass demonstrations against the proposed merger of ten banks into four and consequent closure of six public sector banks. The demonstrations were led by the All India Bank Employees’ Association (AIBEA), the largest bank union in the country, and Bank Employees Federation of India (BEFI).
The demonstration is a part of the full month agitation programme of the employees unions. Nearly 3.50 lakh bank employees are set to observe a strike on October 22 demanding the Modi government to retract its biggest bank consolidation plan.
The protest of the employees was observed on the same day when Union Finance Minister Nirmala Sitharaman claimed that the state-run banks’ mega merger “is going smoothly,” while addressing the media.
The unions, in their disapproval, have said that the central government has been looking forward to the privatisation of the public sector banks.
Also read: Bank Officers’ Association Opposes Bank Mergers
The Indian banking industry is currently gripped by mounting Non-Performing Assets (NPAs). According to a report, in the first four years of the Modi government 1.0, Indian banks wrote off Rs. 2.17 lakh crore on account of writing off NPAs of 525 defaulters. AIBEA believes that, instead of taking tough measures to recover the bad loans, the merger will only divert the public attention, hinting that the move—in the name of banking reforms—will only help the big corporates.
Moreover, BEFI has claimed that merger leads to decrease in the profitability of the banks, due to the bad loans actually going upwards. This is because the “big-banks”, created as a result of the merger, are prone to risky exposures and thus, also create a crisis in the economy, the union explained.
In addition to this, the unions have also raised concerns regarding closure of branches and reduction of staff as a consequence of the bank merger.
As per the mergers announced by Finance Minister Nirmala Sitharaman on August 30, United Bank of India and Oriental Bank of Commerce will be merged with Punjab National Bank, making the proposed entity the second largest public sector bank. Syndicate Bank will be merged with Canara Bank, while Allahabad Bank will be amalgamated with Indian Bank. Similarly, Andhra Bank and Corporation Bank will be consolidated with Union Bank of India.
Also watch: 'Bank Merger Is A Step Towards Privatisation'
“A meeting has been scheduled on October 18 with the Central Labour Commissioner to discuss various issues,” Debasish Basu Chaudhary, General Secretary of BEFI told NewsClick.