The Hindu Business Line : Left not softening stand on merger of PSU banks

THE resolve of the Left parties to oppose the merger of PSU banks does not appear to have diminished despite the upping of the sales pitch by the Finance Minister, Mr P. Chidambaram, in recent days.

In an indication that the Government could be in for some tough negotiations and cajoling on the issue, major Left parties - the CPI (M) and CPI - told Business Line that they were still "extremely apprehensive" of the plans on the merger of State-owned banks. Trade unions too said that they would continue to oppose any move on bank mergers.

"Though we have to take a final view on the issue, we are very apprehensive of the moves of the Government on bank mergers," the senior CPI (M) leader, Mr S. Ramachandra Pillai, said.

He said that the party's stand would take a view on the issue only after the Government gives a clear-cut idea on what it intends to do. "We have asked the Government for details. We would study their proposals and take a view on the issue," Mr Pillai said.

No formal paper from Govt: He said that the Government has not circulated any formal paper on bank mergers yet. In recent days, Mr Chidambaram has been trying hard to build a larger consensus on the need to go ahead with merging PSU banks. He has been arguing that the larger size of some banks that would have an international presence would be a necessity to stay competitive globally.

No logic in consolidation: The senior CPI leader, Mr D. Raja, said that the willingness of the Left parties to discuss the issue of bank mergers should not be interpreted as a softening of their stand. "Where is the softening (of our views)? Agreeing to talk does not mean that we are diluting out stand," Mr Raja told Business Line.

He said that though the Left parties do not intend to be dogmatic on any issue while entering into a discussion, CPI does not see any logic in going ahead with consolidating PSU banks. He pointed out that on the contrary, there might be a need for more banks and consequently more bank branches.

"We need more banks and more bank branches, not less. Even the US that has a much small population than ours has many more banks than we have. So where is the logic in trying to reduce the numbers?" Mr Raja said.

He said that besides the Left parties, the Government would also have to take the bank trade unions into confidence on its plans and the implications.

When contacted, the All India Trade Union Congress (AITUC), that has a powerful influence on PSU bank employees, said that it would oppose any move towards consolidation. "We will oppose any moves to merge PSU banks," Mr D. L. Sachdev, Secretary, AITUC, said.

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

Stories in this Section
UTI Bank `top arranger' in H1

Financial services offshoring moves up the value chain

Rupee tad lower; bond prices down

South Indian Bank H1 net at Rs 14 cr

Banks pare home loan exposure

SBI Life targets Rs 200-500 cr of IMD redemption

Chidambaram may discuss capital raising at bankers' meet

GTB defaulters keen to negotiate settlement: OBC chief

T-bill auctions fully subscribed

Left not softening stand on merger of PSU banks

`Public issue by January likely'

Union Bank gets nod for public issue