AIBOC to hold protest marches to oppose bank privatisation

All India bank officers’ union AIBOC on Monday said it will hold protest marches across the country from Wednesday to oppose privatisation of banks by the government.

The All India Bank Officers’ Confederation (AIBOC), the apex organisation of bank officers in the country, is organising Bharat Yatras from different parts of the country, to mobilise public opinion against bank privatisation ahead of the winter session of Parliament, the union said in a statement on Monday.

This will culminate in a ‘Bank Bachao, Desh Bachao’ rally here at Jantar Mantar on November 30.

Large-scale privatisation of banks will hurt

The AIBOC said it has invited leaders of the farmers movement, trade unions, political parties and people’s organisations to the rally.

The government had amended the General Insurance Act in the monsoon session of Parliament. It is widely anticipated that it will introduce amendments to the Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980 and the Banking Regulation Act, 1949 in order to pave the way for bank privatisation, it said.

Finance Minister Nirmala Sitharaman had announced privatisation of some public sector banks and PSU general insurers in the last Union Budget.

‘Will weaken security of bank deposits’

Opposing the bank privatisation move by the government, the officers’ union said it will weaken the security of bank deposits of the customers.

Re-imagining PSU bank privatisation

Individual bank deposits in India totalled around ₹87.6 lakh crore in March 2021. Of this, ₹60.7 lakh crore, or around 70 per cent were under the custody of the public sector banks (PSBs).

“Clearly, Indian depositors prefer the safety and security of the publicly owned banks. Bank privatisation will remove the sovereign guarantee behind the banks and make the deposits less safe and secure,” the AIBOC said.

The FRDI Bill, which was tabled by the Union government in 2017, but later withdrawn because of public backlash, was also aimed at removing the sovereign guarantee behind the PSBs, it added.

Besides, privatisation of state-owned banks will also squeeze the credit flow to farmers, small businesses as well as the weaker sections of the society, it said, adding privatisation will also exclude the poor and rural customers from banking.

It said that private banks have opened less than 3 per cent of the 43.8 crore PM Jan Dhan Yojana accounts till date. Whereas 31 per cent of the all PSB branches are in rural areas, private sector banks have only 20 per cent of their branches catering to the rural segment.

“This is because private sector banks cater more to the affluent sections and disproportionately concentrate their resources in the metropolitan areas because of their narrow focus on profitability. Privatisation of PSBs will adversely impact financial inclusion,” Soumya Datta, General Secretary, AIBOC, said in the release.

The bank officers’ union body also raised concerns that it will bring back bank failures, weaken the banking sector in the country while rewarding crony capitalism among others.

Bank credit growth down

The AIBOC said the annual bank credit growth in India has fallen over the past 10 years.

“This slowdown in bank credit growth is mainly on account of the heavy financial losses suffered by the PSBs. Between 2011-12 and 2020-21, ₹29.5 lakh crore worth of NPAs have accumulated in the banking system in total, with the PSBs accounting for ₹22.8 lakh crore, i.e. 77 per cent of the total accretion of NPAs”, it said.

The losses made by the PSBs are mainly contributed by the large corporate borrowers. Over 13 per cent of all advances made by the PSBs to large borrowers have turned into NPAs, it added.

In its appeal, the AIBOC asked the people of India to rise up against the government’s retrograde policy of selling out our public sector enterprises, which form the backbone of our national economy.

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