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

Savarkar 'criminally betrayed' Netaji and his INA by siding with the British rulers

By Shamsul Islam* RSS-BJP rulers of India have been trying to show off as great fans of Netaji. But Indians must know what role ideological parents of today's RSS/BJP played against Netaji and Indian National Army (INA). The Hindu Mahasabha and RSS which always had prominent lawyers on their rolls made no attempt to defend the INA accused at Red Fort trials.

India reaches 8th of 10 stage genocide: US Muslim advocacy group raises 'alert'

By Hena Zuberi* India has reached the 8th stage of genocide with the persecution of the Muslim community. Stating this, Professor Greg Stanton, who heads Genocide Watch, declared a Genocide Emergency Alert for India today at Justice For All online briefing.

Anti-poor? 'Cumbersome' to link aadhaar, voter ID for people sans internet access

By Prashant Kumar Chaudhary, Ajit Kumar Jaiswal*  At present, technology plays an increasingly crucial part in modelling human existence by offering a variety of solutions to many of the challenges individuals confront in the real world. As a result, every branch of research works to provides means to solve these difficulties precisely and efficiently. The Central government works along the same lines as well.

'Dargah site was a temple': Claim in Gujarat following post-Babri verdict demands in UP

By Rajiv Shah  Will Gujarat also see demands to replace mosques and dargahs with Hindu temples? It would seem so, if a new fact-finding team conclusion is any indication. Apprehending the “danger” of communal conflagration, it has cited the claim on a 15th century dargah was originally a Hindu temple – allegedly quite on line with what has been happening in UP following the Supreme Court verdict on Babri Mosque.

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.

Why Church in India today needs a Rutilio Grande, martyred for stance on social justice

By Fr Cedric Prakash SJ*  For the people of El Salvador, January 22, 2022 will be more than just a red-letter day. Three of their sons, Jesuit Fr Rutilio Grande and his two lay associates 72-year-old Manuel Solorzano and 15-year-old Nelson Rutilio Lemus (and Italian Franciscan missionary Fr Cosme Spessotto who was also martyred) will be beatified in San Salvador.

Sweden-backed study: India won't achieve 2030 UN goals, officials can't recognise SDG

By Rajiv Shah  A Swedish Society for Nature Conservation (SSNC)-sponsored study, carried out by the advocacy group Consumer Unity & Trust Society (CUTS) India, seeking to analyse the United Nation's Sustainable Development Goal (SDG) No 12, Responsible Consumption and Production (RCP), has regretted, it is "very unlikely" India will achieve any of the targets of SDG 12 by 2030 "unless some serious measures are taken by the government to reverse the present trend."

Gender insensitive? Model Gujarat's cyclone relief package ignores 40,000 fisherwomen

CSJ volunteers talking to fisherwomen By Rajiv Shah  A Centre for Social Justice (CSJ) note on the Gujarat government’s compensation package to the victims of the devastating Tauktae cyclone, which hit the coastal belt of Saurashtra's Amerli, Rajula, Una, and Gir-Somnath districts in May 2021, has said, the relief offered was so terribly inadequate that many of the fisherfolk were not able to fish for the rest of the year.

Savarkar 'opposed' Bhagat Singh's, Netaji's dream of India, supported British war efforts

By Shamsul Islam* In a shocking development, the student wing of the RSS put the busts of martyrs Bhagat Singh and Subhash Chandra Bose with Savarkar's on one pedestal at the University of Delhi late in the night on August 20, 2019. Bhagat Singh sacrificed his life for a socialist-democratic-secular republic and Netaji raised Azad Hind Fauj (INA) consisting of people of all religions and regions for armed liberation of India.

Haridwar call for genocide direct result of Modi 'tolerating' Islamophobic policies

By Our Representative  A high-level briefing organised in Washington DC, in which as many as 17 human rights and interfaith organizations -- including Amnesty International USA, Genocide Watch and Hindus for Human Rights, apart from several persons in their individual capacity -- participated, has come down heavily on what they called "Prime Minister Narendra Modi’s Islamophobic policies and tolerance of open incitement by Hindu extremists for a genocide of Muslims."