CITU DENOUNCES DESTRUCTIVE DECISION OF THE  GOVT ON MERGER OF BANKS CALLS FOR UNITED RESISTANCE STRUGGLES

The Centre of Indian Trade Unions denounces the utterly destructive decision of merging 10 public sector banks into 4 entities, thereby reducing the number of public sector banks to 12.

In fact, this disastrous exercise is meant for drastically squeezing the public sector banks’ operational areas through inevitable closure of huge number of bank-branches, severely affecting employment and also affecting the spread-over and availability of banking services to common people particularly in comparatively remote areas, besides further weakening the concerned PSBs. As a result, the private sector banks including foreign banks will get more open field for their business in the urban areas; and the vast rural areas will be left virtually without any banking services. Also the Govt’s own scheme of direct benefit transfer (DBT) on various welfare measures in the rural areas is destined to get squeezed and infractuous; it will virtually deprive the poor of their legitimate benefits owing to non-availability and/or decline of the bank branches in the rural vicinity.

The experience of previous cases of merger of banks established the inevitability of such disastrous consequences. After merger of 5 Associate Banks with State Bank of India, around 1000 branched had been closed. Merger of Dena Bank and Vijaya Bank with Bank of Baroda is going to shut down around 800 more branches. A substantial section of those closed or going-to-be-closed branches are in the rural areas, where the private banks never tread even by mistake.

And such phenomenon of squeezing of operational area of banking services is also going to have damaging impact on channelizing  of savings of  common people through bank deposits, in the track of developmental activities/projects and employment generating commercial activities; rather this is going to be provocation and/or allurement  for diverting common peoples’ savings either to speculative market or towards dubious chit-fund instruments.

The merger of banks is being justified by the Govt on ground of strengthening and consolidating the concerned banks; but in reality such merger will further weaken all the banks post merger. Problems of public sector banks emanate from the deliberate default in loan-repayment by the big corporate houses and solution lies in stern action by the Govt for outright recovery of the huge loan amounts from defaulter corporates with penalty.  Instead, the Govt of the day is busy in legitimizing pilferage of bank money by the defaulter corporates through Insolvency and Bankruptcy Code Procedure, forcing the public sector banks to sacrifice substantial portion their legitimate dues just to favour the defaulters. The Govt of the day is  actually engaged in destruction of the of the country’s financial service network which got widely expanded post nationalization of banks and insurance sector. This is detrimental to national interests.

CITU strongly condemns such destructive move and hails the proactive move of the United Forum of Bank Unions to launch immediate protest countrywide. They will definitely launch a bigger militant action to resist this destructive game plan of the Govt. CITU calls upon the working class also raise their voice of protest with active solidarity with the struggling bank employees.

(Tapan Sen )General Secretary