Skip to main content

Banks merger: Govt deciding things outside Parliament, it's being made 'redundant'

By Devidas Tuljapurakar
Nirmala Sitharaman, Minister of Finance, in her recent press conference, announced the merger of 10 Public Sector Banks (PSBs) to carve out four big banks. In the process six, PSBs are being closed. Presently the government is going through a syndrome of 5 trillion-dollar economy, and all their acts aim at achieving it.
The government, while pushing this agenda, is not prepared to accept the crude reality that the economy is in crisis. This also leads to the most inconvenient question: who is responsible for the present state of affairs? It is obvious that this is the manifestation of wrong policy prescriptions since 2014.
At this hour of the crisis, there is a need to stabilise the economy. However, the latest announcement by the Finance Minister suggests that the government itself is leading us to instability. This will result in suspending the operations of those ten banks spread out across the borders in the entire nation. In case of merger of associate banks with the State Bank of India (SBI), in the process of consolidation, SBI has lost the business of associate banks.
SBI suppressed this fact by manoeuvring quarter ending data. In case of merger of Dena and Vijaya Bank with Bank of Baroda, same was steered by most able corporate leader meticulously. While steering merger, all issues such as cultural, emotional etc. were handled delicately by respecting the entity which is being merged.
All the issues were addressed professionally but with a positive frame of mind. Thus, Bank of Baroda, in the process of merger, did not lose the business. This was exceptional and looking to the present leadership in those banks cannot be expected to repeat.
All those mergers are neither at the instance of customers, who in the market economy are said to be the king nor by the shareholders or board of directors of the respective banks. Employees and officers have opposed it. This means all those mergers are driven solely by the government. 
This has been done so to carve out big banks to cater to the requirement of big corporates who presently are routing through consortia for their credit requirements which it may facilitate them to avail from one bank.
This means mergers are to facilitate big corporates who are the root cause for today’s crisis in banking. As stated by the RBI in the "Financial Stability Report", of the total credit, 55 per cent goes to big corporates, of which 87 per cent is non-performing assets (NPAs). This speaks volumes on the government’s intentions.
In case of merger of associate banks; consequently, more than 1000 branches were closed and now in case of merger of Dena and Vijaya with Bank of Baroda around 500 branches are being closed. Now again a minimum of 2,000 branches are likely to be closed. 
Common people are being marginalised. They are being pushed outside banking and development
On the one hand, the government wants to implement Jan Dhan. The government claims that they have opened more than 45 crore savings Bank accounts. In the implementation of all flagship programmes of this government such as MUDRA, Atal Pension, Jivan Suraksha and all other insurance schemes for underprivileged sections of society, Direct Benefit Transfers meant for underprivileged etc. banking has a crucial role which can be served by opening more and more outlets and certainly not by closing it. Thus the government is pushing self-defeating propositions.
In the process of merger of banks large scale closure of branches is taking place and this space is being made available to new generation private sector banks, Payment banks and small finance banks in the private sector. Post reforms, in the last two decades, PSBs have lost market share of about 20 per cent, which means they have lost the business of about Rs 35 lakh crore.
On the one hand, successive governments are attempting to privatise PSBs, and since they are unable to do so, they are privatising the business. Maybe now this government with an absolute majority in Lok Sabha and a majority in Rajya Sabha may do it. 
Precisely this is the danger which is looming large on the Indian financial sector. The present political dispensation is one the which opposed nationalisation of banks in 1969 and now they may attempt to do so to fulfil their agenda on the lines of the abolition of Article 370 in the Constitution.
The changes in finance are being decided outside Parliament. The Lok Sabha is being made redundant in the decision-making process. This is the irony of the situation. Judiciary is averse to touch the subjects in the name of the policy. In the process, a mockery of democracy has been made. The Constitution’s Fundamental Rights and Directive Principles are meant only for the academic discussions on TV shows.
In the process, the common people are being marginalised. They are being pushed outside banking and development. This is likely to lead for not only economic but social imbalances as well. Does it mean that we are inviting anarchy? Only time will tell. But rest assured we have a strong home minister, more strong then prime minister. Both of them individually and severely are capable of taking care of us.
---
Source: Centre for Financial Accountability

Comments

kumar gautam said…
I am unable to understand that one side govt as well as RBI is in view to provide 1banking system for every 2000 people/5km peripheral.at another side it is involved in mega merger.At employee side ,it can easily be assessed that every deprived employee can't give the best without the satisfaction workplace.where we may think it through several HRM theory(Marlow,Hertzberg or XYZ).Another side the main problem in my personal view is divination of thought process where we may start dailoug with our own house/bank or make sure to spread it in whole banking system.In any survey it is easily seen that bankers are working more than regulated hours but they are not getting anything just now in several time.
Just we have a news for releasing 1.7 lakh crore by RBI for economy.
Is it not the fund indirectly created by our banks.Still we are so productive but we get aleays several disheartening news
In form of society hurdles and nuisance with bankers as well wage and other facilities.
We must think"how we could express our works done in past and what I did get till date ""
Anonymous said…
We need to evolve a new Ownership & Mmgt Structure for PSU Banks. Mere amalgamation while allowing scale and reducing costs, will not deliver much.
For namesake only,today PSU Banks are Board managed with Directors having no stake.þ

TRENDING

'Very low rung in quality ladder': Critique of ICMR study on 'sudden deaths' post-2021

By Bhaskaran Raman*  Since about mid-2021, a new phenomenon of extreme concern has been observed throughout the world, including India : unexplained sudden deaths of seemingly healthy and active people, especially youngsters. In the recently concluded Navratri garba celebrations, an unprecedented number of young persons succumbed to heart attack deaths. After a long delay, ICMR (Indian Council for Medical Research) has finally has published a case-control study on sudden deaths among Indians of age 18-45.

SC 'appears to foster' culture of secrecy, does not seek electoral bond details from SBI

By Rosamma Thomas*  In its order of November 2, 2023 on the case of Association for Democratic Reforms vs Union of India contesting constitutional validity of electoral bonds, the Supreme Court directed all political parties to give particulars of the bonds received by them in sealed covers to the Election Commission of India. SC sought that information be updated until September 2023. 

How national chauvinism 'overtook' sport despite cricketing glory of World Cup 2023

By Harsh Thakor*  The recently-concluded cricket World Cup was a testimony or manifestation of the thrills, intensity, twists and turns in sport and evolution of the game of cricket. It carried on the trend of the World Cups of yesteryears. Possibly, this was the best ever Indian team in a World Cup, and arguably amongst the best ever to contest a World Cup.

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah*   The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Only 12% of schools RTE compliant: Whither 6% budgetary allocation for education?

By Ambarish Rai* Despite Indian state’s commitment of 6% GDP on education, the Finance Minister completely ignored right to education for children and strengthening implementation of RTE Act which makes education a fundamental right in her budget speech . The Right to Education (RTE) Forum, which is a collective of different stakeholders in education, condemns this neglect of a legal entitlement, which is unconstitutional and demand for overall increase in the budget to ensure improvement in learning outcomes and overall enhancement of quality education.

Savarkar in Ahmedabad 'declared' two-nation theory in 1937, Jinnah followed 3 years later

By Our Representative One of the top freedom fighters whom BJP and Prime Minister Narendra Modi revere the most, Vinayak Damodar Savarkar, was also a great supporter of the two nation theory for India, one for Hindus another for Muslims, claims a new expose on the man who is also known to be the original proponent of the concept of Hindutva.

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

'Ambiguous policy': India late in advocating EVs as energy storage in national grid

By Shankar Sharma*  This is regarding the points raised by the Chief Electricity Authority’s (CEA's) advocacy for usage of electrical vehicles (EVs) as energy storage technology, and few associated issues . An objective reading of what he states should reiterate the enormously growing importance of battery energy storage systems (BESS) in our need to transition to a net-zero carbon scenario for the country.

Union Health Ministry, FSSAI 'fail to respond' to NHRC directive on packaged food

By Our Representative  The National Human Rights Commission (NHRC) has expressed deep concern over the adverse health effects caused by packaged foods high in salt, sugar, and saturated fats. Recognizing it as a violation of the Right to Life and Right to Health of Indian citizens, the quasi-judicial body called for a response from the Food Safety and Standards Authority of India (FSSAI) regarding its selection of front-of-pack labels aimed at providing consumers with information to make healthier choices.