The Hindu Business Line : Bank staff plan campaign against privatisation move

The All India Bank Employees' Association (AIBEA) and the All India Bank Officers' Association (AIBOA) are gearing for a nationwide campaign against the privatisation move in banks, two months ahead of Bank Nationalisation Day.

They have, in effect, decided to observe July 19 - Bank Nationalisation Day - as `save public sector banks day'. Alleging the Government of `misdirected policies and misplaced priorities' in banks, the AIBEA and AIBOA representatives said, "When we highlighted the various negative trends in the banking sector during our campaign in July-August 2007, the Government had assured that it will initiate the necessary steps. But pressures are continuing to mount with the reforms agenda in various forms. We have, therefore, decided to undertake further campaign programmes against these unwarranted moves and efforts."

No to recommendations

The associations have demanded rejection of the Tarapore Committee, Anwarul Hoda and Raghuram Committee recommendations for reduction of government equity to 33 per cent.

While reiterating that mergers and consolidation are unwarranted in the Indian context, Mr C.H. Venkatachalam, General Secretary, AIBEA, and Mr R.J. Sridharan, General Secretary, AIBOA, stressed the need for strengthening the public sector banks.

Citing the RBI report, Mr Venkatachalam said, "While the government talks of total financial inclusion, banks are slowly moving away from the common masses. The rural branches are getting reduced and urban branches are on the rise."

In 2004-05, of the total 1,250 new branches, only 15 were in the unbanked area; it fell to 2 out of the total 1,331 (new) branches the following year. In 2006-07, only 36 out of 2,366 new branches were in the unbanked area. The Hoda Committee's recommendation for total freedom to banks to open branches would lead to urbanisation of banking instead of penetrating to unbanked areas."

Demands

The associations have demanded the need to ban high cost bulk deposits from corporates, increase in interest rate on savings account, a halt to sub-PLR credit to corporates, greater thrust to priority sector credit and extension of farm credit at 4 per cent.

The AIBEA has further alleged that banks are treating corporate defaults and delinquency softly. "Reduction through waivers, provisions, write-offs, CDRs, shifting to ARCs etc, cannot be a consolation as new NPAs get added in every ban," Mr Venkatachalam said.

He said the additional new NPAs in public sector banks has risen from Rs 16,700 crore in 2005-06 to Rs 19,600 in 2006-07, in private banks from Rs 3,500 crore to Rs 5,100 crore and foreign banks to Rs 1,400 crore from Rs 1,100 crore.

He also emphasised the need to revitalise the co-operative banks, restructure the regional rural banks, and mobilise domestic savings.

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