Money & Banking

Govt should strengthen PSBs instead of privatisation: AIBEA

Our Bureau Mumbai | Updated on February 19, 2021

The United Forum of Bank Unions plans to strike on March 16 against government’s call to privatise two PSBs.

The Government should strengthen public sector banks (PSBs) by helping them recover bad loans instead of privatising them, according to the All India Bank Employees’ Association (AIBEA).

“The only problem PSBs facing is bad loans. Most of the bad loans are due to the corporates and rich industrialists,” said CH Venkatachalam, General Secretary, AIBEA, in a statement. He underscored that the Government should support PSBs, take action against the defaulting corporates and industrialists, and not privatise the banks.

“Many private sector banks have collapsed in our country. Last year YES Bank was in trouble, and through eight financial intermediaries, including State Bank of India, that bank was rescued. Recently, Lakshmi Vilas Bank, another private sector bank, got into trouble, and it was given to a foreign bank. Hence, one cannot accept that private sector banks are very efficient,” said Venkatachalam.

The Association General Secretary observed that only public sector banks give loans to common people, poor people, agriculture, small-scale sectors, etc. Private banks help only the big corporates, he alleged. “Public sector banks give permanent jobs to young unemployed. In private banks, it is only contract jobs.”

“Private banks will not open branches in rural areas. Only public sector banks have opened thousands of branches in the villages,” he said. He feared that if PSBs are privatised, rural branches will be closed in the name of cost-saving.

With 75 per cent of total branches in the country, public sector banks have opened 40.50 crore Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts, but private sector banks, with 25 per cent of the total branches, have opened only 1.25 crore PMJDY accounts.

Also read: Govt could raise up to ₹12,800 cr if it divests in 2 PSBs: CARE Ratings

“Total deposits in the banking sector today is 146 lakh crore. This is hard-earned public savings. We cannot allow private hands to play with this huge public savings. Hence privatisation is a bad idea. If the Government is serious about economic development, public sector banks should be strengthened,” he added.

The United Forum of Bank Unions, the umbrella body of nine trade unions in the banking sector, has called for a strike on March 15 and 16 to protest against the Government’s decision to privatise two PSBs.

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Published on February 19, 2021
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