AROUND a million bank employees and officers went on a two-day strike on March 15 and 16 all over the country against the privatisation of public sector banks. The following day, March 17, General Insurance employees struck work and the next day, on March 18, employees of the Life Insurance Corporation of India (LIC) will go on strike. 

This wave of strikes is in response to the far-reaching privatisation drive of public sector enterprises announced in the union budget on February 1, in which the privatisation of the financial sector is also targeted. 

The finance minister announced in her budget speech that two public sector banks would be privatised (the first time the term was used) within this financial year. Also, one of the four General Insurance companies would be sold off; further there would be an IPO of shares of LIC to disinvest a part of the government’s stake in it. Along with this, the FDI stake in the insurance sector is to be raised to 74 per cent, legislation for which has been approved by the cabinet and introduced in parliament.

With these measures, a turning point has been reached in the liberalisation of the financial sector. Since the advent of liberalisation in 1991, opening up of the financial sector has been a key goal.  For the neoliberal regime, it is unacceptable to have public ownership of banks. 

In India, fourteen major private banks were nationalised in 1969. This paved way for the growth of the banking network and its spread into rural areas. Though bank nationalisation did not actually mean a democratisation of access to credit, given the overall framework of the capitalist path of development, it did broaden the pace of capitalist development by making loans available to the agricultural sector and small and medium enterprises. Since 1991, successive governments have been under pressure from international finance capital to open up the banking sector.  They began disinvestment of shares in public sector banks, allow opening of private banks and operation of foreign banks. Throughout the period of the UPA-I and II governments, each and every step in this direction was met with stiff resistance on the part of the banking unions, the working class movement and the Left parties.

It was this resistance which prevented the opening up of the financial sector fully to external capital flows and this served as a bulwark to protect the Indian financial system at the time of the 2008 global financial crisis. 

The same process was begun in the insurance sector during the time of the UPA-II government; a move was made to allow 26 per cent FDI in the insurance sector. It could not get implemented due to the opposition of the Left parties.  However, when the Vajpayee government was in office in 1999, 26 per cent FDI was pushed through. This was increased to 49 per cent by the Modi government in 2015.

The public sector banks have been steadily accumulating a huge amount of “Non-Performing Assets” (NPAs). The NPAs are expected to touch 13.5 per cent of the total assets of the banks in 2021.  These NPAs were incurred by the banks due to government policies from the days of the UPA government and which got further enhanced during the Modi government.  The nationalised banks had to dole out big loans to corporates in the name of investment in the infrastructure sector. Most of these loans became bad debt.  More than 75 per cent of such loans were given to corporates.

The Modi government has already written off Rs 6.6 lakh crores of such bad loans since 2014. Now the privatisation of public sector banks would lead to these very corporates who looted the banks to get control of it.

Now the Modi government is going all-out to privatise both the banking and insurance sectors. This must be seen along with the ambitious plan to privatise most of the public sector enterprises in the various sectors of the economy. The Narendra Modi government’s privatisation drive is a shameful surrender to the diktats of international finance capital and the United States which has been continuously urging the Indian rulers to privatise banks, open up the financial sector and dismantle the public sector as a whole.

The people’s savings and public resources, which have so far been under social and State control, are to be handed over to the financial-corporate oligarchy.   Only a few months ago, an internal working group of the RBI had recommended that corporates be allowed to start banks.

The banking and insurance unions have been waging a valiant struggle against disinvestment and privatisation in the past three decades. It is this resistance which slowed down the pace of liberalisation. Now they are faced with the biggest challenge when there is a government which has the political clout in parliament to get these new measures through.

It is, therefore, necessary that the fight being put up by the employees of the banking and insurance sectors is intensified and reinforced by linking it to the wider struggles against privatisation of the public sector in general.  On March 15, at the call of the Central Trade Unions and the Samyukta Kisan Morcha, joint protests were held outside hundreds of railway stations against the privatisation drive and the farm laws. The fight against privatisation must become a people’s issue and it must be taken up politically on the agenda of all secular and democratic opposition parties.

The lakhs of bank employees and insurance employees, while continuing the struggle, should also ensure that the BJP pays a political price for this betrayal.  They and their families, quite a few of whom voted for the BJP in the 2019 Lok Sabha elections taken in by Modi’s nationalist jingoism, should mobilise others to come out and vote against the BJP in the state assembly elections to be held soon. 

There should be an effective political campaign launched to expose the false nature of the Hindutva-nationalist rhetoric. Selling off of the precious national assets and resources of the country will endanger national sovereignty, compromise our independence and expose the people to more economic exploitation. Here is a government which talks about Atmanirbhar Bharat while subordinating India to the whims of big corporates and their foreign finance collaborators.

(March 17, 2021)