Money & Banking

PSB merger ‘a hidden agenda to deprive Bengal’s banking sector’

Our Bureaus Mumbai / New Delhi | Updated on September 06, 2019 Published on September 06, 2019

West Bengal Chief Minister urges PM to do a re-think on the proposed merger of two Kolkata banks with PNB and Indian Bank

Taking exception to the Centre’s big-bang public sector bank merger plan, West Bengal Chief Minister Mamata Banerjee has written to Prime Minister Narendra Modi, seeking a re-think of the proposed merger of two Kolkata-based banks – Allahabad Bank and United Bank of India – with New Delhi-based Punjab National Bank and Chennai-headquartered Indian Bank.

Noting that Allahabad Bank was formed in 1865 and United Bank of India was established in 1914 in Kolkata, Banerjee wrote: “I would strongly urge you to not merge UBI with Punjab National Bank and Allahabad Bank with Indian Bank and also raise the spectre of moving the headquarters of these two leading banks out of Kolkata.”

She also questioned the sudden downgrading of UCO Bank from a national to a regional bank, again headquartered in West Bengal. “This indicates some hidden agenda to deprive West Bengal’s banking sector,” she said in her letter.

AIBOC petition

Banerjee’s letter follows a representation to her by the All-India Bank Officers’ Confederation that had sought her intervention in the Union Finance Ministry’s plan to merge 10 PSBs into four.

“I am also deeply concerned about the overall impact of the knee-jerk merger move across the country with negative effects on the entire banking sector,” she further wrote, adding that in a federal structure like India, it is imperative to consult States and political parties before taking such a decision. Requesting the Prime Minister not to “deprive Bengal like this”, she pointed out that UBI is the convenor of the State-level banking committee and also the lead bank in 11 vital districts in the State.

“The merger of UBI with a Delhi-headquartered bank will destabilise and undermine the significant grassroots role of UBI, at a heavy cost to rural Bengal,” she noted.

She also highlighted the large number of branches that both banks have in the State, and said that the proposed mergers will impact these branches and hurt the “developmental momentum” of West Bengal. While Allahabad Bank has 562 branches in West Bengal, UBI has 875 across the State.

The Chief Minister raised concerns about the future of 6,598 employees of UBI and 4,201 employees of Allahabad Bank, and questioned their job security.

“I am also afraid that the headquarters of UBI and Allahabad Bank may be shifted to Delhi and Chennai. This will be a serious blow to the employees and banking activities of UBI and AB,” she stressed.

The Trinamool Congress leader alleged that when SBI was amalgamated with associate banks, as many as 1,500 branches were shut down across the country, and 80 of those closed branches were in West Bengal. Similarly, after Bank of Baroda’s amalgamation with Vijaya Bank and Dena Bank, it is considering closure of 800-900 branches, including 30 branches in West Begal. Thus, “my legitimate fear is that West Bengal may face branch closures and banking services will be cut off to our people,” she complained.

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Published on September 06, 2019
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