The Hindu Business Line : Bank officers threaten stir against mergers

THE All India Bank Officers' Confederation (AIBOC) has threatened a `lightning strike' if the Government goes ahead with its plan of merging banks or opening up the banking sector for further foreign direct investment.

The General Secretary of AIBOC, Mr Shantha Raju, said that the confederation was opposed to the merger of banks because nobody has been able to offer a convincing justification for the mergers. Second, he said that the Government was trying to push through the move through its dictat, rather than having the issue discussed in Parliament.

"Trying to circumvent a public debate is neither fair nor proper," Mr Raju said.

He also observed that there had been no call for the mergers from the bank managements, until before the Finance Minister suggested consolidation in the banking industry.

Mr R.C. Agarwal, President, AIBOC, said that the banking industry was doing well, both in terms of profitability and social service.

He said that trying to make Indian banks "globally strong" by consolidation was meaningless.

Even if all the Indian banks were merged the new entity would not compare with a global bank like the Citibank or the Standard Chartered Bank.

Mr Raju said that the AIBOC had sponsored a study, by an independent commission comprising economists and bankers, to evolve `alternative banking and financial policies'. The committee headed by Mr S.P. Shukla, a former Finance Secretary, is expected to give its report next month.

Mr Agarwal said that allowing FDI in private sector banks up to 74 per cent would lead to a `virtual takeover' by `foreign raiders'.

Judged in the context of FDI in power and other sectors in the recent past, such a move would not be in the larger interests of the banking industry, he said.

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