Says liberalised regulations have led to collapse of many banks in developed
The All-India Bank Employees Association on Monday said it will launch an agitation if the Reserve Bank of India goes ahead with any proposal to allow take over of Indian banks by foreign banks.
“We strongly oppose the RBI Governor’s proposals aimed at takeover of our banks by foreign banks. These are against our country’s interest,” said C. H. Venkatachalam, General Secretary of the Association.
The Association is opposed to the statement reportedly made by RBI Governor Raghuram Rajan in Washington to the effect that the central bank will soon unveil major banking reforms, which will entail allowing foreign banks to take over domestic banks.
At present, 80 per cent of the banking sector in India is under public sector, another 15 per cent under private sector and only about 5 per cent are foreign banks.
“Foreign banks have never contributed to our country’s economic growth and development. They are interested only in profits and have no role in social banking.
“Some of these foreign banks have also been involved in various scams in the past. Their licences should have been cancelled, but unfortunately the RBI Governor wants to encourage them,” said Venkatachalam in a statement.
Pointing out that Indian banks deal with more than Rs 70 lakh crore of public money as deposits, the AIBEA said the country cannot afford to liberalise its regulations.
The experience of the US and other countries shows that liberalised banking regulations have led to crises and collapse of banks.
Hundreds of banks in the US have been closed in the last few years. The US Government has bailed out the big banks in their country.
However, public sector banks in India are functioning well and do not face such crises.