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Our Bureau

Thiruvananthapuram , July 22

THE National Confederation of Bank Employees (NCBE), which held its State convention at Thrissur recently, has expressed itself strongly against moves aimed at disinvestment, privatisation and merger in the banking sector.

The conference was also held in the backdrop of Government moves to amend important legislations such as the Banking Regulation Act Section 12(2) and Reserve Bank of India Act, said Mr P.K. Patnaik, General Secretary, NCBE.

According to the NCBE, the move to reduce Government equity in public sector banks would transform the existing 27 such banks into private banking companies. Changes in economic policy from 1991 had played havoc with the public sector, apart from opening up the economy to invasion of foreign capital. The foreign money had come to be employed largely in effecting takeover of companies and had not assisted asset formation in basic sectors.

Arguments being put forward by the Finance Minister and some heads of public sector banks (PSBs) pertaining to size and business were baseless. Even if the top 10 banks of the country were to be merged together, the merged entity would not be able to compete with the bank ranked 10th in the world. No other global bank can claim to command the customer reach and national development initiatives of the PSBs of India. Any attempt to weaken the system would seriously compromise the economic stability of the country.

The Reserve Bank wants all banks to have a capital base of Rs 300 crore within three years. This, the NCBE said, would only help foreign banks to open wholly-owned subsidiaries and acquire Indian financial institutions. This takeover would change the lending character of PSBs, as they would be assessed in comparison with these foreign banks in respect of per employee business, profitability and efficiency.

The NCBE also demanded overhauling of banking laws to make recoveries easier. Personal properties of defaulting big borrowers/corporate houses/MNCs must be attached without delay and they must be barred from holding public offices. Wilful default must be declared a criminal offence and the names publicised.

The NCBE also took serious exception to the outsourcing of internal work in banks. Besides cutting employment, this would lead to details of banking transactions getting to the hands of private persons.

Among those present at the sessions were Mr E. John Joseph, President, and Mr K. Raja Kurup, General Secretary, NCBE (Kerala).

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