Skip to main content

Banks merger 'reflects' Modi's pro-corporate slant: Public sector units deserve to die

Anti-merger demonstration by bank employees
Counterview Desk
Several civil rights organizations, trade unions and their representatives have called the recent Government of India announcement of the merger of 10 public sector banks (PSBs) as a systematic step towards “privatising” them, adding, it is line with “a slew of waivers” for the so-called wealth creators, who are actually corporate houses, in the name of reforms.
Pointing out that the “reforms” ranged from the repugnantly pro-corporate relaxations for tax evaders to the “ridiculous” suggestion to government departments to buy new vehicles to boost the automobile sector”, in a statement public public by the Financial Accountability Network (FAN) -- India, they have said, this is nothing but an attempt to “decimate PSBs in a single stroke.”
Signed by Ashok Choudhury, All India Union of Forest Working People; Citizen Consumer and Civic Action Group, Chennai; D Thomas Franco, former General Secretary, All India Bank Officers’ Confederation; Dr Sunilam, Kisan Sangharsh Samiti; Gautam Mody, New Trade Union Initiative; Leo Saldanha, Environments Support Group; Madhuresh Kumar, National Alliance Peoples’ Movements; Nishank, Delhi Solidarity Group and others, the statement demands withdrawal of the merger decision and “genuine” steps to recover bad loans.

Text:

We the undersigned organisations and individuals condemn the Government’s decision to merge 10 Public Sector Banks (PSBs) and demand immediate withdrawal of the mergers; stop privatisation of the PSBs; take genuine actions to recover bad loans; make wilful default a criminal offence; and draft environmental and social safeguard policies for lenders.
Nirmala Sitharaman, the Union Minister of Finance, in her press conference last Friday stated that the merger will not result in employee retrenchment; quoting the example of the merger of Dena Bank, Vijaya Bank and Bank of Baroda.
What the minister ignored was that, as per the Parliamentary Standing Committee on Finance’s 2018 Report, by 2020, 95% of GMs, 75 % DGMs and 58% of AGMs would be retiring. The government is yet to take any concrete steps to address the impending major human resource crisis. This is neither mentioned nor redressed in the new announcements. Instead, mergers will only overburden the already understaffed banks.
Another inevitable fallout of mergers is the closing down of bank branches, ATMs and other banking services. But the minister cared not for the plight of the common people but easing lending for the corporates.
While the new big banks would be lending to big borrowers, the common people would be left at the mercy of Banking Correspondents, failing ATMs, Payment Banks, the new small banks and the likes for their banking needs. The most imprudent step is this mad rush to create big banks when globally; the “Too Big to Fail” model has been debunked.
In the merger announcement, the systemic annihilation of PSBs was packaged in neat wrappers of governance reforms. The Bank Boards have been ‘empowered’ to appraise the senior management, to give longer-term or to reduce the number of members in the Board, to enhance the ‘fees’ of Non-official Directors (NOD), to train directors and more. 
But the cherry on the cake is the Management Committee of the Board’s (MCB) loan sanction threshold increased to 100% to favour large borrowers and them now having the power to recruit “Chief Risk Officer” from the market. Let us not forget that these are the same boards that have caused the NPA crisis by their reckless credit approval without any due diligence. 
Government’s intention is not to recover NPAs and strengthen PSBs but to clear defaulters' books of the bad loans in time to ease privatisation
Not a single action has been taken on any of the board members for lending to repeat defaulters. Further, one needs to know if the Chief Risk Officer, would function based on the “Risk-based Classification” of the banks prescribed by the now ‘dumped’ Financial Resolution and Deposit Insurance (FRDI) Bill.
One cannot miss the misleading half-truths that have become a regular feature of government announcements. Finance Minister claimed at the outset that the gross NPAs of PSBs have come down from Rs 8.65 lakh crore (December 2018) to Rs 7.9 lakh crore (March 2019).
What Madam Minister conveniently left out was the 1.94 lakh crore write-offs were done by PSBs alone in FY18-19. The quantum of loans written off by public sector banks in FY18-19, according to Bloomberg Quint, accounts to nearly 25 per cent of their total gross non-performing assets. 
Similarly, in FY17-18, the write-offs by PSBs amounted to Rs 1.25 lakh crore; and between 2014 and 2018 write-offs alone amount to Rs 5,55,603 crore, according to RBI data. It is a colossal waste of public money and the resources of the banks. Hence the government’s intention is not in recovering the NPAs and strengthening the PSBs but to clear their books of the bad loans in time to ease privatisation.
Privatising banks has been a quarter-decade-old project of the state. The Narasimham Committee in the 1990s paved way for foreign and private banks in the sector, reducing the number of banking officers through the Voluntary Retirement Scheme. But it could not achieve its dream of reducing the government shares to 33 per cent or the phasing out of priority sector lending.
But, almost every successive committee and their recommendations prepare the sector for a market take over. In fact, most of the announcements by the Minister have already been recommended by the PJ Nayak Committee (2014) like the mergers and strengthening the Board. The other major recommendation was to reduce the government shares to less than 50 per cent. Unless we unite to fight, that will soon become the reality.
Sitharaman’s first press conference laid down a slew of waivers for the “wealth creators” in the name of ‘reforms’. The reforms ranged from the repugnantly pro-corporate relaxations for tax evaders to the ridiculous suggestion to government departments to buy new vehicles to boost the automobile sector. The second press conference attempts to decimate PSBs in a single stroke.
This government’s contempt for the public sector is no surprise. When the Prime Minister’s stated position is that Public Sector Units deserve to die, this is only expected. In recent times we have seen the systemic destruction of many public sector institutions and now the attack is on the PSBs. What we need is greater accountability and transparency of banks from top to bottom. The progressive and democratic forces have to oppose this blatant destruction of PSB in the name of mergers.
---
Click HERE for signatories

Comments

TRENDING

Rescind Gates Foundation award to Modi, demand three Nobel Peace laureates

Counterview Desk
In a major boost to those opposing the award to the Gates Foundation’s proposed to be awarded to Prime Minister Narendra Modi for his Swacch Bharat Abhiyan, three Nobel Peace Prize laureates, Mairead Maguire (1976), Tawakkol Abdel-Salam Karman (2011) and Shirin Ebadi (2003), have in an open letter called upon Milinda and Bill Gates to withdraw their decision, stating Modi is allegedly involved in human rights violations.

Gujarat's incomplete canals: Narmada dam filled up, yet benefits 'won't reach' farmers

By Our Representative
Even as the Gujarat government is making all out efforts to fill up the Sardar Sarovar dam on Narmada river up to the full reservoir level (FRL), a senior farmer rights leader has said the huge reservoir, as of today, remains a “mirage for the farmers of Gujarat”.
In a statement, Sagar Rabari of the Khedut Ekta Manch (KEM), has said that though the dam’s reservoir is being filled up, the canal network remains complete. Quoting latest government figures, he says, meanwhile, the command area of the dam has been reduced from 18,45,000 hectares (ha) to 17,92,000 ha.
“According to the website of the Sardar Sarovar Narmada Nigam Ltd, which was last updated on Friday, while the main canal, of 458 km long, has been completed, 144 km of ranch canals out of the proposed length of 2731 km remain incomplete.
Then, as against the targeted 4,569 km distributaries, 4,347 km have been constructed, suggesting work for 222 km is still pending. And of the 15,670 km of minor canal…

Report on "torture" in Kashmir jails: 44% detainees stripped naked, 29% electrocuted

Counterview Desk
A recent report titled “Torture: Indian State’s Instrument of Control in Indian-administered Jammu & Kashmir”, published by the Association of Parents of Disappeared Persons (APDP), has claimed to build “on the body of human rights documentation on torture” in Jammu and Kashmir (J&K) through an examination of 432 case studies. It seeks to focus on "the trends and patterns, targets, perpetrators, contexts and impact of torture" in the state.

Ceramic worker dies: 20,000 workers in Thangadh, Gujarat, 'risk' deadly silicosis

By Our Representative
Even as the country was busy preparing for the Janmashtami festival on Saturday, Hareshbhai, a 46-year-old ceramic worker from suffering from the fatal lung disease silicosis, passed away. He worked in a ceramic unit in Thangadh in Surendranagar district of Gujarat from 2000 to 2016.
Hareshbhai was diagnosed with the disease by the GCS Medical College, Naroda Road, Ahmedabad in 2014. He was found to be suffering from progressive massive fibrosis. He is left behind by his wife Rekha sister and two sons Deepak (18) and Umesh (12),
The death of Hareshbhai, says Jagdish Patel of the health rights group Peoples Training and Research Centre (PTRC), suggests that silicosis, an occupational disease, can be prevented but not cured, and the Factory Act has sufficient provisions to prevent this.
According to Patel, the pottery industry in the industrial town of Thangadh has evolved for a long time and locals as well as migrant workers are employed here. There are abou…

Bullet train impact report Japan agency property: Govt of India tells Gujarat NGO

The National High Speed Rail Corporation Limited (NHSRCL) has told Gujarat-based environmental organization, Paryavaran Suraksha Samiti (PSS) that the detailed report of Japanese International Cooperation Agency (JICA) representatives on their visit to Gujarat and Maharashtra assess the impact of the Mumbai-Ahmedabad bullet train project on farmers is not its property, but that of JICA.

NHSRCL letter to PSS, signed by activists Rohit Prajapati, Krishnakant and Swati Desai, comes following the latter’s request to it on June 10 for the report. PSS was one of the NGOs that represented JICA on the project, saying, if implemented, it would adversely impact farmers, even as pointing towards the fact that the project itself is unviable and Indian Railways needs to invest, instead, more on upgrading the present railway infrastructure.
Following the NHSRCL reply, PSS has shot a second letter to JICA, insisting that the latter should share a copy of the report, even as providing details of the …

Karma tribal festival an occasional to campaign for tribal rights: IPMSDL

By Our Representative
The International Indigenous Peoples Movement for Self Determination and Liberation (IPMSDL), in a solidarity statement has suggested that the current Karam festival of Central India -- which seeks to promote sisterhood, friendship, cultural unity, and closer link to nature -- should be the occasion to campaign against alleged efforts to violently drive away forest dwelling communities from their forest homes.
"Millions are threatened to lose lands and livelihood under the implementation of Forest Rights Act (FRA) of 2006", the statement States, adding, "As corporate interests continues to enter tribal territories and extract profit from its natural resources, indigenous people are pushed to further marginalization and discrimination."
Asserting that indigenous movement in India "remains steadfast in keeping their culture, deeply linked to their lands alive by carrying out their heritage and struggles", IPMSDL, even as extending "…

Allow international human rights observers, media to access Kashmir: US lawmakers

Counterview Desk
In a letter to US Secretary of State Mike Pompeo, two members of the American Congress, Pramila Jayapal and James McGovern, raising "significant concerns" about what they call "humanitarian and human rights crisis in Jammu & Kashmir”, quoting "credible reports" from journalists and advocates on the ground" have said that "the Indian government has detained thousands of people with no recourse, imposed de facto curfews on residents' and cut off internet and telephone access in the region.”

Amidst Modi celebrations, thousands protest 'massive' submergence in Narmada Valley

By Our Representative
Thousands of women and men gathered on at the Shaheed Stambh in Badwani, Madhya Pradesh, to raise their voice against what they called "the destruction of the Narmada Valley", protesting against Prime Minister Narendra Modi and Gujarat BJP rulers for celebrating the Sardar Sarovar dam being filled up to the full reservoir level (FRL) on September 17, which also happens to be Modi's birthday.
Calling it a black day for the people of the Valley, whose villages and farms got submerged because of highest-ever water level having been achieved in the dam, the Narmada Bachao Andolan (NBA), which organised the parallel rally across the border with Gujarat, regretted in a statement that Modi's celebration at the dam took place amidst " martyrdom of the Valley".
The demonstration in Badwani was preceded by a vehicles rally, which took rounds of the city streets. They were joined by people from several villages of Dhar district. They gather…

Kandla Port Trust activities 'destroyed' mangroves, affecting rare camel species: NGT

By Rajiv Shah
Taking serious note of large-scale destruction of mangroves on about 750 acres in Bhachau taluka of Kutch district, the National Green Tribunal (NGT), Delhi, has “directed” the Gujarat government, its forest department, and the Gujarat Coastal Zone Management Authority (GSZMA), to “jointly inspect the area” and fix responsibility as to who is “responsible for obstruction of the creeks” next to the Kandla Port Trust (KPT), leading to the damage to the plantations in the area.

Narmada valley: SC notice to Gujarat, MP, M'rashtra on submergence sans rehabilitation

By Our Representative
Thr Supreme Court has issued notice to Gujarat, Madhya Pradesh and Maharashtra governments following a Narmada Bachao Andolan (NBA)-backed petition seeking the explanation as to whether large areas of Narmada Valley have gone into submergence by filling up the Sardar Sarovar dam up to the full reservoir level (FRL) without rehabilitating the project affected families (PAFs).