The Hindu Business Line : Bank unions object to payments corporation formation

New Delhi, Feb. 8 Bank unions have objected to the formation of the proposed National Payments Corporation of India (NPCI) without taking into account the assurances given in Parliament by the Union Finance Minister, Mr P. Chidambaram.

Responding to the public notice relating to the formation of NPCI, where names of nine individuals have been mentioned as applicants, the United Forum of Bank Unions (UFBU) has now conveyed to the Government that mere mention of individual names as applicants for setting up the corporation gives a very “misleading picture” about the ownership of the proposed corporation.

‘Not apparent’

“Nowhere in the given public notice advertisement have they said or indicated that NPCI is being floated by banks. Only names of nine individuals have been given. Why not the organisation names? If one were to go by this, it is not apparent at all that public sector banks will hold at least 51 per cent in NPCI as assured by the Finance Minister in Parliament,” Mr C.H. Venkatachalam, Convenor of UFBU, told Business Line.

On January 8 this year, nine individuals, without mentioning their organisations and designations, gave a “public notice in local newspaper in Mumbai about their intention to form NPCI and called for objections from the public within 30 days.” The notice mentioned that NPCI would carry out activities of bankers, maintain and own clearing houses, and carry out electronic payments.

Given assurances

Faced with opposition from Left parties and bank unions over the planned move to privatise clearing house operations through the formation of NPCI, the Government had in November last year given an assurance that NPCI would be a public sector company and not a private sector company, and that public sector banks will hold not less than 51 per cent shareholding in the company.

Assurance was also given that Real Time Gross Settlement (RTGS) would continue to be operated by the RBI; staff deputed by the RBI, and public sector banks in these clearing houses would not be disturbed; RBI would carry on as the service provider in four metros; and the changeover to NPCI would not happen overnight but over a period of time.

“These assurances do not appear in any form in the public notice. Hence we had to record our objection to the formation of NPCI without taking into account the assurances,” Mr Venkatachalam said.

Meanwhile, Member of Parliament, Mr S. Sudhakar Reddy, has written to the Finance Minister urging him to advice the Indian Banks’ Association (IBA) to ensure that there are no deviations from the assurances made in Parliament.

More Stories on : Financial Services | Trade & Labour Unions

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page