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Nationalised banks

N. P. Kumar, e-mail

The reported statement of the general secretary of AIBOC opposing the privatisation of nationalised banks is not in tune with the fast-changing economic situation in the country.

The privatisation of nationalised banks will, in no way, affect the rural economy since regional rural banks (RRBs) were started exclusively for rural credit to cover more rural credit needs.

Apart from RRBs, there are Farmers' credit cooperative societies, Farmers' service societies, and so on, catering to the credit needs of the rural sector. Unfortunately, both the RRBs and the nationalised banks (in rural areas) are incurring huge losses

and the economy cannot afford to withstand the losses of public sector institutions anymore.

In a way, privatisation of nationalised banks will, in no way, affect the credit needs of the rural sector.

Nationalised banks are basically commercial banks emphasising on profit. Any commercial venture cannot bear the losses for an unreasonably long time. In this context, the managements of the

nationalised banks need not consult the trade unions for closing down\merging loss-making branches.

It is time the managements of nationalised banks work for recovery of NPAs before opposing privatisation of nationalised

banks.