Tuesday, October 4, 2022

Bank strike: Unions have a valid question for Finance Minister

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  • The unions want the government to roll back its decision to privatise public sector banks and instead work at strengthening state-run lenders

  • Most of the branches of state-run lenders could not be opened because of the strike; clearing of cheques didn’t happen

New Delhi: The first day of the two-day bank strike saw a strong turnout with around 8 lakh employees, including several youngsters, taking part, All India Bank Employees’ Association (AIBEA) General Secretary CH Venkatchalam told PSU Watch on Monday. Nine unions in the banking sector took part in the protests held across India on Monday under the umbrella of the United Forum of Bank Unions (UFBU). The unions want the government to roll back its decision to privatise public sector banks and instead work at strengthening state-run lenders, who are responsible for delivering several of the government’s social welfare schemes to the grassroots level.

While pointing out that state-run banks played a crucial role during demonetisation, floods, the COVID-19 pandemic, delivering benefits under the PM SVANIDHI scheme, Jan Dhan Yojana, MUDRA, etc, Venkatchalam said, “I want the government to hold discussions with the unions. If they are not satisfied with the way public sector banks are functioning, the government should talk to us about it.”

Bank strike: Why are the unions opposing bank privatisation?

On being asked why are the unions opposing bank privatisation, Venkatchalam said that the orientation of government banks is different from private banks. “There is nothing wrong with private banks. But the orientation of public sector banks and private banks are different. While private banks operate with the sole objective of making profits, public sector banks strike a difficult balance between social welfare and profit-making. Government banks have several rules, restrictions, audit and controls.”

While pointing out that Finance Minister Nirmala Sitharaman promised low-interest agriculture loans, education loans in the Budget 2021-22, Venkatchalam asked, “How will these be delivered without PSBs?” He added, “If public sector banks were to give this money to industrialists, the interest rates would be higher. Why is the government asking banks to give away low-interest loans? Because public sector banks have a different orientation. And India needs both private and public sector banks. Why privatise PSBs?”

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Asserting that banks are incurring losses because of bad loans and provisions for bad loans, Venkatchalam said that privatisation is not the solution. He cited the cases of ICICI Bank and Yes Bank and added that private banks take more risks with public money than public sector banks. 

Sanjiv Kumar Bandish, convenor of UFBU, said, “This is a do or die situation for us. The protest is not just in the interest of bank employees but for all citizens of the country. Private banks are not in the interest of the nation.”

How did the bank strike impact banking operations?

Most of the branches of state-run lenders could not be opened because of the strike. Clearing of cheques didn’t happen since banks were not accepting cheques for clearance. “On an average, about 2 crores cheques/instruments worth about Rs 16,500 crore are held up for clearance. Government treasury operations, and all normal banking transactions have been affected,” said AIBEA in an official statement.

Commenting on the impact of the bank strike, Devdas Menon, General Secretary of All India Bank Officers’ Confederation, said that ATMs also ran dry due to the strike because banks have been closed for four days straight. 

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)

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