September 08, 2019

Oppose Bank Mergers

THE BANK Employees Federation of India(BEFI) has strongly condemned the decision of the union government to merge 10 public sector banks(PSBs) into four.

The country has just observed 50 years of bank nationalisation when the entire country recollected the yeomen service provided by the PSBs for the nation as well as its people. The PSBs gave the Indian economy a strong foundation. It was observed that since 1991, following the new economic policy, successive governments at the centre have formed several committees starting with Narsimham Committee to push through reforms in the financial sector as a part of the neo-liberal economic policies being pursued at the dictates of monopoly capital, foreign as well as national. There was a common recommendation of all the committees formed by the central government to reduce the number of PSBs. The present government also expressed the same opinion of merger of PSBs.

After the merger of five associate banks and Bharatiya Mahila Bank with State Bank of India, more than 1,000 branches and administrative offices were closed. As per media reports, about 800 bank branches may be shut following merger of Dena Bank and Vijay Bank with Bank of Baroda effected on April 1, 2019. The central government announced programme of financial inclusion for which opening of a greater number of branches is necessary, but post-merger the people at large are being denied of service from the banks due to large scale closure of branches.

Immediately after the first Modi government came into power in 2014-15; the PSBs as a whole are suffering net losses consecutively for four years since FY 2015-16 despite securing sizable amount of operating profits. These losses are attributed to high provisioning for bad debts, loans written off, frauds and loans due from wilful defaulters. When stringent measures from the government were necessary to recover bad debts, these corporate defaulters were given an escape route of not paying their dues through Insolvency and Bankruptcy Code, 2016. To divert the attention from such pro-corporate measures the proposal of recent merger has been mooted.

BEFI as well as the umbrella organisation of bank employees and officers, the United Forum of Bank Unions (UFBU) has been opposing the mindless merger move of the PSBs. The bank employees and officers observed countrywide bank strike on December 26, 2018 against the merger move of Dena Bank and Vijaya Bank with Bank of Baroda. The UFBU decided to launch nationwide protest demonstrations against the merger move announced on August 31. The BEFI calls upon the common people of the country to oppose the merger move, which have been decided to disturb the economic sovereignty of the country and whose ultimate motive is privatisation of the Public Sector Banks.