AT a time when the whole country was awaiting the results of the Lok Sabha elections, a panel appointed by the Reserve Bank of India (RBI), headed by former Axis Bank chairman P J Nayak, came out with its report advocating privatisation of public sector banks (PSBs). The eight member committee constituted by the RBI on January 20, 2014, had had its first sitting on February 18 and submitted its report on May 12 --- that is, too promptly and before the three months time stipulated for it since the first sitting. The only member from the public sector banks in this committee was Ms Shubhalakshmi Panse, former chairman cum managing director (CMD) of Allahabad Bank. The panel’s report said that the financial position of the public sector banks, which have a market share of nearly 70 percent, is very fragile. It further said that there are several external constraints imposed upon public sector banks which are inapplicable to their private sector competitors. These constraints encompass dual regulation --- by the finance ministry and by the RBI which goes substantially beyond the discharge of a principal shareholder function. The report then proposed that the government must distance itself from several bank governance functions which it presently discharges. For this purpose it recommended that the Bank Nationalisation Acts of 1970 and 1980, together with the SBI Act and the SBI (Subsidiary Banks) Act, must be repealed. The Tamilnadu state unit of the Bank Employees Federation of India (BEFI) has strongly opposed this recommendation of the P J Nayak Committee. It recalled that again and again several attempts were made by the ruling parties at the centre and the RBI to privatise the PSBs. The speed of this move, however, increased manifold after Raghuram Rajan, a protagonist of the neo-liberal policies, took over as the RBI governor. It is to be remembered that more than 500 private banks had collapsed in India between 1947 and 1969 before major private banks were nationalised. Even after 1969, more than 25 private banks went bankrupt and, of course, it is the PSBs that were forced to bear the brunt. Through the statement issued by C P Krishnan, its general secretary, on May 14, the BEFI TN unit also recalled that more than 450 private banks have fallen flat in the USA since September 2008 when a global financial crisis erupted.  The BEFI TN also pointed out that the preamble of the Bank Nationalisation Act 1970 said the private banks were serving only the interests of their promoters and that they needed to be nationalised so that they could serve the national priorities related to food production, employment generation, abolition of regional imbalance etc. But the privatisation of PSBs is contradictory to these goals and also to the avowed objective of the RBI and the government of India of financial inclusion.  The priority sector lending which has improved the standard of living of crores of the underprivileged people will be given up if the nationalised banks are privatised, the BEFI has warned. The main reason behind the suicide of lakhs of farmers in the past two decades is the lack of adequate institutional credit. This trend will further aggravate if the PSBs are privatised. The loans for education, or for the small and medium enterprises (SMEs), will also disappear which will deprive the poor students of higher education and kill the lakhs of job opportunities which the SMEs create. Saying that it stands for people’s money to be spent for the welfare of the people, the BEFI-TN expressed strong opposition to the privatisation move of the RBI and the union government as it is inimical to the interest of the common man.