Under the banner of United Forum of Bank Unions (UFBU), an umbrella body of the top nine bank unions, more than 10 lakh bank employees have given the call for a one-day strike on December 26, in protest against the proposed merger of Vijaya Bank and Dena Bank with the Bank of Baroda.
The merger of the state-owned banks, Vijaya Bank and Dena bank, both of which are under prompt corrective action (PCA) framework of the Reserve Bank of India (RBI), with the larger peer Bank of Baroda, was announced by the government in September 2018. This merger would make Bank of Baroda the third-largest lender in the country, next to the State Bank of India and ICICI Bank.
The Unions have said that the merger of the banks will lead to the closing of a large number of branches, and the customers will have to face hardships. They have said in a statement that the banks are already burdened with various government schemes like Jan Dhan Yojana, Pradhan Mantri Housing Scheme, Mudra, and the likes.
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In a statement to media, C.H. Venkatachalam, General Secretary of All India Bank Employees’ Association (AIBEA), which is one of the nine unions under UFBU, said, “Mergers will surely result in closure of branches, whereas we need branch expansion to make banking accessible to all. Mergers are the very antithesis of branch expansion.”
"The number of banks in the USA for a population of 323 million is far more than the number of banks in India for a population of 1.35 billion. India is not overbanked. So, there is no need for consolidation," he added, explaining how the banking industry in India needs expansion, and not consolidation.
He also questioned the fate of non-performing assets by asking, “In BoB, Dena Bank and Vijaya Bank, the total NPA (non-performing asset)/bad loan is Rs. 80,000 crore. I wonder whether these bad loans will be automatically recovered when these banks are merged?”
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On December 21, around 3.20 lakh officers from various state-run banks in the country were on a strike under the banner of All India Bank Officers’ Confederation (AIBOC), opposing the proposed merger. Their demands also included immediate pay revision of officers up to scale VII, full mandate for scale I to scale VII officers, a defined benefit pension scheme unlike the New Pension Scheme (NPS), and introduction of five-day work week. The Confederation claimed that the proposed merger will lead to a decline in job opportunities, youth unemployment, lack of systematic job profiles, and increase in the amount of NPAs.