Punjab & Region

Bharat yatras to oppose Bank privatization to start from November 24

The Fact News Service
Patiala, November 23

All India Bank Officers’ Confederation (AIBOC), the apex organisation of bank officers in the country, is organising Bharat Yatras from different parts of the country, to mobilise public opinion against bank privatisation on the eve of the winter session of parliament. The Bharat Yatras will culminate at a “Bank Bachao, Desh Bachao” Rally in New Delhi on November 30th, 2021. Leaders of the farmers movement, trade unions, political parties and people’s organisations have been invited to the “Bank Bachao, Desh Bachao” Rally. While the general insurance act has already been amended in the monsoon session of parliament, it is widely anticipated that the Government will be introducing amendments to the Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980 and the Banking Regulation Act, 1949 in order to pave the way for bank privatisation as announced by the Union Finance Minister in the Union Budget 2021.

In a statement issued by Secretary of AIBOC Punjab Rajiv Sirhindi told that the Individual bank deposits in India totalled around Rs. 87.6 lakh crore in March 2021. Of this, Rs. 60.7 lakh crore, i.e. around 70% were under the custody of the Public Sector Banks (PSBs). Clearly, Indian depositors prefer the safety and security of the publicly owned banks. Bank privatisation would remove the sovereign guarantee behind the banks and make the deposits less safe and secure. The FRDI Bill which was tabled by the Union government in 2017, but later withdrawn because of public backlash, was also aimed at removing the sovereign guarantee behind the PSBs. He said that over 60% of the total credit to the priority sector; i.e. small and marginal farmers, non-corporate individual farmers, micro-enterprises, self-help groups and weaker sections like the SCs, STs and minorities; is provided by the 12 PSBs and the 43 Regional Rural Banks sponsored by them. Private and foreign banks have been meeting shortfalls in their 40% priority sector lending target in net bank credit by buying Priority Sector Lending Certificates from the PSBs and RRBs. Privatisation of PSBs would adversely impact credit flow to the priority sector.

Sirhindi said that less than 3% of the 43.8 crore PM Jan Dhan Yojana accounts have been opened by the private sector banks till date. 31% of all PSB branches are in the rural areas, while rural bank branches account for only around 20% of private sector branches. This is because private sector banks cater more to the affluent sections and disproportionately concentrate their resources in the metropolitan areas because of their narrow focus on profitability. Privatisation of PSBs will adversely impact financial inclusion.

The Bank Officers’ leader said that the losses made by the PSBs are mainly contributed by the large corporate borrowers. Over 13% of all advances made by the PSBs to large borrowers have turned into NPAs. Moreover, cases of bank frauds have increased very sharply in the recent years, with over Rs. 4 lakh crore worth fraud cases detected between 2017-18 and 2020-21. The central government has failed to bring the perpetrators of the big-ticket loan frauds to book, like Vijaya Mallya, Nirav Modi, Mehul Choksi, Jatin Mehta, etc.

Privatisation of the PSBs would imply selling the banks to private corporates, many of whom have defaulted on loans from the PSBs. The growing NPAs and frauds in the private sector banks show that these occur independent of bank ownership. Far from offering any solution to the NPA problem, PSB privatisation will only reward crony capitalism.

The Bank Officers’ leaders present appealed to the people of India to rise up against the government’s retrograde policy of selling out our public sector enterprises, which form the backbone of our national economy. We appeal to the millions of small depositors of the PSBs, the farmers, MSMEs, Self-Help Groups and loanees from the weaker sections of society, to rise up against bank privatisation, which will harm their interests. We appeal to all civil society organisations, farmers’ and workers’ unions, political parties and other stakeholders of our democracy to join and support our movement in defence of the PSBs, and public sector enterprises in general. Together, we shall defeat the policies of privatisation.

Those among present include Binay Sinha, Dinesh Gupta, Jasbir Singh, Manish Kumar, Kamal, Puneet Verma, Sudershan Arora, Rohit Jarora, Arun Chawla, Akshay Goel, Sanjeev Kumar.