The Hindu Business Line : ‘Employees entitled to more when banks make more profits’

While speaking at the inauguration of Union Bank of India’s 100 per cent Core Banking Service, “ employees are the ones who contribute to the profits of the banks, and therefore, are entitled to a share of the profits. The more profitable the sector, the wages should be higher. "

The Minister said that the bank managements and unions must resolve their differences and talk things out.

He said banks should move towards offering service round the clock. He urged unions of public sector banks not to strike work because PSU banks are preferred by the common man.

Mr Chidambaram lauded Union Bank for bringing all its branches under core banking solution (CBS) and said that the bank is on its way to achieving a net profit of Rs 1,100 crore by March 31, 2008 and net NPA of 0.25 per cent. As on March 31, 2007, the bank had net profit of Rs 845 crore and net NPA of 0.96 per cent.

Union Bank today brought all its 2,513 outlets under CBS network. The bank is also planning to network the 421 branches of its two Regional Rural Banks by September 2009, said Mr M V Nair, Chairman and Managing Director, Union Bank of India.

The bank is also setting up of 10 Union Loan Points for fast processing and disbursal of retail loans.

Even if global growth slows down in 2008-09, India will be the second fastest growing economy next fiscal Mr Chidambaram said.

Outlook bright

Earlier, speaking at the at the valedictory function of the Indian Merchants Chamber, the Minister said “the economic growth may not be keeping pace with earlier estimates, but we are sure it will be over eight per cent this fiscal. Saving and investment rates have been buoyant.”

Of course, there are concerns over high interest rate, shrinking exports and falling consumption, but it is an economic cycle. Things will improve, the outlook is bright, he said.

Small and medium enterprises (SMEs) have nothing to worry. Some of the SMEs have shut shop, but equal number has started afresh. SMEs contribute about 40 per cent of exports.

Good economics insist investment in primary education, health care and power, besides encouraging gender equality. The government is following the principal of good economics by channelling investment in these sectors, he said.

There are about 300-400 million people to whom the benefits of economic growth have to be reached.

“We should allow good economics to work. It might not work for everyone at the same time, but I’m sure each one will enjoy the benefits,” he said.

Assuring the businessmen that the current inflation is not due to policy distortion or policy mistake, Mr Chidambaram said, hoarding of agriculture commodities in anticipation of higher inflation was adding to price rise in the near term.

Unsustainable prices

Speaking on the occasion, the HDFC chairman, Mr Deepak Parekh, said “in the global financial markets there is more bad news to come in, before good news follows.”

On interest rate, he said “commodity prices in the international market are high and unsustainable. In India, if inflation continues to rise, interest rates will follow suit.”

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