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.รพ

TRENDING

Buddhist shrines massively destroyed by Brahmanical rulers in "pre-Islamic" era: Historian DN Jha's survey

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".

Liberating Bengal Hindus? Worst flames of communal division, lessons from the past

By Shamsul Islam*  The whole thrust of the RSS-BJP election campaign for 2021 state assembly elections in West Bengal has been to save Bengal from the rule of Mamata Bannerjee who is allegedly not a ‘Hindu’. Prime Minister Narendra Modi, a self-proclaimed Hindu nationalist, as usual set the polarizing agenda. While addressing the first election rally, he called upon the electorate to overthrow the ‘nirmam’ (cruel) rule of Mamata by showing a ‘Ram Card’. He did not name Hindus directly but there was no confusion about the religious identity of the electorate Indian PM was addressing to.

Pradeep Bhattacharya, who spent his life for the cause of working masses, rational thinking

By YS Gill*  At 11:30 pm on May 3, 2021, I lost my best friend and comrade Pradeep Bhattacharya. He spent his life dedicated to the cause of the working masses and rational thinking. A person of thorough scientific outlook and a well-read student of Marxian thought, he was a walking encyclopedia and could speak on a wide variety of topics from art and culture to science, philosophy, history and politics.

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.

Rs 5 crore 'demand' for India Today anchor: What about 52 lesser souls who died in April?

By Vidya Bhushan Rawat*  A well known Hindutva protagonist masquerading as journalist passed away recently resulting in messages of condolences and tribute right from the Prime Minister and the Home Minister to progressive liberals expressing grief of his untimely death. It is said that he passed away due to cardiac arrest, though the fact is, he was also Covid infected. The Prime Minister and the Home Minister termed him a ‘brave’ journalist, insisting, his passing away has left a big ‘vacuum’.

Modi's Hindutva 'ensuring' empowerment of rich, disenfranchisement of poor

Bhabani Shankar Nayak*  The Hindutva socio-psychopaths are neither nationalists nor patriotic people. These medieval reactionary forces don’t understand the idea of citizenship, justice, liberty, equality and humanism. Indian democracy is merely an electoral transaction for the Hindutva forces. Hindutva forces neither follow science nor understand the sufferings of fellow human beings. These core qualities are common among the Hindutva forces in India.

Communal rhetoric? Hindutva preached by RSS-BJP is 'monolithic', not Hinduism

By Prem Verma*  I am a devout Hindu but not a believer of RSS Hindutva form of Hinduism which brings about hatred of other religions. My Hindu religion has not taught me to look down on other religions and neither has it instilled in me to go about converting others to my religion because my religion is superior.

Despite crisis, Modi's Hindutva strategy 'increased' mass base in society and polity

By Bhabani Shankar Nayak*  Narendra Modi and his RSS brethren can qualify as masters of fake claims. There is a long lists of lies spread by RSS, BJP and their IT cell workers. It is not a personality disorder or lying with fear. They are trained to defend Modi and his government’s decisions in whatever possible way. They defended demonetisation by arguing that it is “an important step” in his fight against black money and corruption.

India's Covid-19 'nightmare': A product of majoritarian Hindutva ideological praxis?

By Bhabani Shankar Nayak*  Indians struggle to find place and time to bury their dead due to the devastating effects of the second wave of Covid-19 in India. The crematoriums in the capital cities are overflowing with dead bodies. People are dying without oxygen and basic medical support. The cities like Delhi and Mumbai are struggling to cope with the rising number of infections and COVID-19 led deaths. The deaths and destitutions are products of a defunct BJP government led by Narendra Modi.

Indian media persons collapsing to Covid disease as fast as 3 per day, third highest

Yogesh Sharma, Shailesh Rawal  By Our Representative  The Switzerland based media rights and safety body, Press Emblem Campaign ( PEC ) has said that it is “alarming for Indian journalists”, who have lost at least 107 colleagues to Covid-19”, noting, Indian “journo-colleagues” have been collapsing to the Covid-19 complications now as fast as three scribes per day. In a statement, PEC said, “India with 107 media corona-casualties has already placed itself on the third position just below Brazil (181 dead) and Peru (140) in the list of Covid-19 victims among journalist.”