Systematical killing of public sector banks, pushing people to money sharks

By Thomas Franco*
It was only after the nationalisation of 14 banks on July 19, 1969, that the banks reached the common people. The main changes that were done included a shift from class banking to mass banking, a shift from big industries to agriculture, the development of small, medium, and micro enterprises, a shift from urban to rural areas, and a reduction in income inequality.

However, after 1991, the reversal began slowly and accelerated in 2014, when the NDA took over the government, with slogans like the government has no business being in business; the public sector was born to die, etc. They couldn’t privatise a public sector bank until now because of the UFBU’s strong opposition.

But using dubious methods, they have reduced the strength of the PSBs. As per the RBI data of March 2014, 82% of the branches, 65% of the loan limit, and 75% of the loans outstanding were with public banks.

The staff strength of PSBs (including SBI) was 844445 whereas private banks, including foreign banks, had a staff strength of only 335615 people. The share of total outstanding bank credit of PSBs as of March 2022 has come down to 54%, and the share of total deposits has come down to 60%. The staff strength in PSBs has come down to 770812, whereas for private banks it has increased to 798977.

For the first time, private banks have more staff than public banks. Look at HDFC Bank, the top private bank. They have 6,342 branches, with only 1,147 (18%) being rural, 2,036 (32%), semi-urban, 1,312 (21%), urban, and 1843 (29%). They have 7.1 million customers.

So the number of customers per employee is just 501. They have a staff strength of 1,41,579 employees. The total value of their business is Rs. 29,28,037 (Depth 15,59,217 + Advances 13,68,820). Now let’s look at the State Bank of India. SBI has 46.77 crore customers, 6.58 times more than HDFC Bank. It has a business of Rs. 67,855,501 crore, which is 2.31 times that of HDFC Bank.

Its staff strength is 2,44,250, 0.5 times more than HDFC’s. Interestingly, while HDFC recruited 21,486 staff last year, SBI reduced its staff by 1402 people; the per-employee customer figure in SBI in 1680. SBI has 8,018 rural branches, 7,215 semi-urban branches, 5,253 urban branches, and 4,462 metro branches.

BOB has a total business of 18,23,093 Cr. with 8,168 branches, of which 34.82% are rural, 25.5% are semi-urban, 18.6% are urban, and 21.62% are metro. BOB has over 13 crore customers and only, 79,000 employees, which is just half of HDFC’s staff strength. The per-employee customer in BOB was 1605. If they increase the staff strength in the public sector, their business, customer service, and profits will certainly improve. PSBs also provide reservations, including those to economically weaker sections among the forward caste.
How much has the government succeeded in weakening the PSBs?

The government promoted and supported private banks such as ICICI, HDFC, and Axis bank with currency chests, government business, fresh currency, and so on.
More licences for private banks and the merger of public banks reduced the number of branches and staff of PSBs
PSBs were forced to open 97.3% of the Jan Dhan accounts, whereas private banks opened only 2.7% of them.
PSBs have opened 15675442 Atal Pension Yojana accounts (91%) as of 31/3/20 where while PVBs have opened just 1562997 A/Cs (9%).
PSBs have been forced to lend more to NBFCs in spite of those failing. They get loans at around 10% interest but lend at 24% or more. The business is shifting to NBFCs, as seen in the RBI Report. They depended on borrowing from and lending only to lucrative businesses. They lend little to agriculture and related activities.
The co-lending model is going to be a huge risk for PSBs. If we take the loans given by PSBs, PVBs, and NBFCs/MFIs, PSBs’ loan outstanding on March 22 was 49.22% (Rs. 73.33 lakh crore), private banks were 31.13% (Rs. 47.02 lakh crore), and NBFCs and MFIs were 19.65% (Rs. 29.67 lakh crore). So public bank loans are less than PVBs plus NBFCs.
Instead of branches, Customer Service Points are opened through National Business Correspondents. Their increase from 167,1170 in 2021 to 35,13777 in 2022 requires closer scrutiny. Where are they? How are they performing?

What has happened is alarming. Public sector banks are marginalised, and understaffed and people complain of poor service and shift to private banks and non-banking companies where the interest rate for loans is much higher. This has increased inequality to its highest level. Poor and middle-class Americans are at the mercy of modern-day loan sharks.

Newspapers in Gujarat reported on January 9 that the police in Gujarat have launched a special drive against usurious moneylenders preying on distressed borrowers, quoting Director General of Police, Ashish Bhatia. In Surat alone, they have filed 34 cases. There have been suicides, rapes, and acts of violence, all because of private moneylenders, says a news article. Sometime back, DGP Tamil Nadu warned people about loan applications after a suicide.

Similar incidents are happening all over the country. This can only be stopped by increasing the number of branches of public sector banks, staffing them, and issuing directives to make small loans. It’s high time for the government to conduct a quick assessment and take action. The NBFCs, MFIs, and private banks This is against the constitution and the idea of a welfare state. This has to be reversed as soon as possible.
---
*Former General Secretary of All India Bank Officers’ Confederation and a Steering Committee Member at the Global Labour University. Source: Centre for Financial Accountability

Comments

Academics urge Azim Premji University to drop FIR against Student Reading Circle

By A Representative A group of academics and civil society members has issued an open letter to the leadership of Azim Premji University expressing concern over the filing of a police complaint that led to an FIR against a student-run reading circle following a recent incident of violence on campus. The signatories state that they hold the university in high regard for its commitment to constitutional values, critical inquiry and ethical public engagement, and argue that it is precisely because of this reputation that the present development is troubling.

Was Netaji forced to alter face, die in obscurity in USSR in 1975? Was he so meek?

By Rajiv Shah This should sound almost hilarious. Not only did Subhas Chandra Bose not die in a plane crash in Taipei, nor was he the mysterious Gumnami Baba who reportedly passed away on 16 September 1985 in Ayodhya, but we are now told that he actually died in 1975—date unknown—“in oblivion” somewhere in the former Soviet Union. Which city? Moscow? No one seems to know.

UAPA action against Telangana activist: Criminalising legitimate democratic activity?

By A Representative The National Investigation Agency's Hyderabad branch has issued notices to more than ten individuals in Telangana in connection with FIR No. RC-04/2025. Those served include activists, former student leaders, civil rights advocates, poets, writers, retired schoolteachers, and local leaders associated with the Communist Party of India (CPI) and the Indian National Congress.

Asbestos contamination in children’s products highlights global oversight gaps

By A Representative A commentary published by the International Ban Asbestos Secretariat (IBAS) has drawn attention to the challenges governments face in responding effectively to global public-health risks. In an article written by Laurie Kazan-Allen and published on March 5, 2026, the author examines how the discovery of asbestos contamination in children’s play products has raised questions about regulatory oversight and international product safety. The article opens by reflecting on lessons from the COVID-19 pandemic, noting that governments in several countries were slow to respond to early warning signs of the crisis. Referring to the experience of the United Kingdom, the author writes that delays in implementing protective measures contributed to “232,112 recorded deaths and over a million people suffering from long Covid.” The commentary uses this example to illustrate what it describes as the dangers of underestimating emerging threats. Attention then turns...

The kitchen as prison: A feminist elegy for domestic slavery

By Garima Srivastava* Kumar Ambuj stands as one of the most incisive voices in contemporary Hindi poetry. His work, stripped of ornamentation, speaks directly to the lived realities of India’s marginalized—women, the rural poor, and those crushed under invisible forms of violence. His celebrated poem “Women Who Cook” (Khānā Banātī Striyāṃ) is not merely about food preparation; it is a searing indictment of patriarchal domestic structures that reduce women’s existence to endless, unpaid labour.

Aligning too closely with U.S., allies, India’s silence on IRIS Dena raises troubling questions

By Vidya Bhushan Rawat* The reported sinking of the Iranian ship IRIS Dena in the Indian Ocean near Sri Lanka raises troubling questions about international norms and the credibility of the so-called rule-based order. If indeed the vessel was attacked by the American Navy while returning from a joint exercise in Visakhapatnam, it would represent a serious breach of trust and a violation of the principles that govern such cooperative engagements. Warships participating in these exercises are generally not armed for combat; they are meant to symbolize solidarity and friendship. The incident, therefore, is not only shocking but also deeply ironic.

India’s foreign policy at crossroads: Cost of silence in the face of aggression

By Venkatesh Narayanan, Sandeep Pandey The widely anticipated yet unprovoked attack on Iran on March 1 by the United States and Israel has drawn sharp criticism from several quarters around the world. Reports indicate that the strikes have resulted in significant civilian casualties, including 165 elementary school girls, 20 female volleyball players, and many other civilians.

India’s green energy push faces talent crunch amidst record growth at 16% CAGR

By Jag Jivan* A new study by a top consulting firm has found that India’s cleantech sector is entering a decisive growth phase, with strong policy backing, record capacity additions and surging investor interest, but facing mounting pressure on talent supply and rising compensation costs .

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

Nalanda mahavihara By Rajiv Shah 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".

Search This Blog