The Hindu Business Line : Bank unions to take merger battle to people

BANK trade unions, which have been opposing the proposals of the Government on consolidation of public sector banks (PSBs) and FDI hike in private banks, are planning to approach the people and political leaders in their second phase of agitation.

Speaking to Business Line here on the sidelines of the 21st conference of Karnataka Bank Employees' Association, the General Secretary of All India Bank Employees' Association , Mr C.H. Venkatachalam, said that people and political leaders would be informed about the `attack' on banking industry. A meeting, on this, next month will decide on the issue.

Referring to the Government's plan to reduce its capital in PSBs to 51 per cent, he said, "That means 49 per cent privatisation of PSBs. With this, the public sector character will change to joint sector." Such a move will increase the presence and pressure of private corporates in PSBs. These private corporates will be more interested in profits than meeting the social objectives of the banks, he said.

Opposing mergers and acquisitions he said India's share in global trade is only 0.75 per cent. The country needs more investments in agriculture and other priority sectors. "Going global means diverting more funds for multinational business, which is not the priority of PSBs," Mr Venkatachalam said.

Mergers should be seen along with the proposals to reduce the Government's equity in banks, he said, adding that private corporates would not be interested in rural credit. The Government has not given any assurance that they will open more branches in rural sector in the post-consolidation era.

On the proposals to hike foreign direct investments in private sector banks, he said foreign investors will take control of nearly Rs 3 lakh crore of Indian depositors' money by merely investing around Rs 2,000 crore.

The Government should publish the list of defaulters and wilful defaults should be made a criminal offence.

RRB merger

Mr Venkatachalam said that the merger of regional rural banks (RRBs) with the sponsor banks was essential to increase the reach of PSBs in rural areas. With the merger RRBs with the sponsor banks, the latter will get a wide branch network in rural areas. "With this, we can reach more rural people, and give more loans which the Government is asking us to do," he said.

Contrary to this, the Government `rejected' the proposal of one of the PSBs in this regard which is not in the interest of the RRBs.

The trade unions are prepared to discuss, including the rationalisation and restructuring of branches in this regard, he added.

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