Friday, August 12, 2022

PSB privatisation: What was the impact of the 2-day bank strike?

Must read

  • In addition to public sector bank employees and staff, officers of old generation private banks were also on strike, said the AIBEA General Secretary
  • Around one lakh bank branches remain closed

New Delhi: The two-day nationwide bank strike against the government’s privatisation plan for public sector banks (PSBs) affected the clearing of cheques worth around Rs 37,000 crore, said CH Venkatachalam, General Secretary of All India Bank Employees’ Association (AIBEA). “There are three cheque clearing centres in India — Chennai, Delhi and Mumbai. In two days — Thursday and Friday — about 38 lakh cheques worth about Rs 37,000 crore were held up,” Venkatachalam said. Giving a grid wise break up, the AIBEA General Secretary said that about 10 lakh cheques worth about Rs 10,600 crore in Chennai, about 18 lakh cheques worth about Rs 15,400 crore in Mumbai and some 11 lakh cheques worth Rs 11,000 crore in Delhi were not cleared.

He said that in addition to public sector bank employees and staff, officers of old generation private banks like Federal Bank, Karnataka Bank, Karur Vysya Bank, CSB Bank, South Indian Bank, Dhanlaxmi Bank, Ratnakar Bank, J&K Bank and Kotak Mahindra Bank were also on strike. Employees of foreign banks like Citi Bank, Standard Chartered Bank, Sonali Bank, Bank of America and others also participated in the strike, although in small number, said Venkatachalam. He added that a section of employees and officers of regional rural banks were on strike too.

Bank strike: 1 lakh bank branches remained shut

Around one lakh bank branches remain closed and some others headed by senior officials were kept open as they did not participate in the strike. However, even in the branches that were open, no transaction could take place as other staff were on strike. The strike was called by the United Forum of Bank Unions (UFBU), an umbrella body of several bank unions. Bank employees were protesting against the Centre’s decision to privatise public sector banks (PSB) and to introduce the Banking Laws (Amendment) Bill, 2021 in the current session of Parliament. The passage of the Bill will allow the government to lower its equity capital in PSBs to less than 51 percent and allow private sector players to take over management control. In Budget 2021-22, the government had announced its intention to privatise two PSBs.

‘Wilful default by corporates have dragged PSBs to crisis’

Sharing the details of the conciliation meetings that took place in Delhi on December 15 between bank unions and Finance Minister Nirmala Sitharaman, Venkatachalam said that the unions had reiterated that they would defer the strike if the government assured them that it would defer the introduction of Banking Laws (Amendment) Bill, 2021 in Parliament. According to him, the only complain that the government had with PSBs was that of huge non-performing assets (NPAs) in which the major share was that of big corporates.

“Successive governments have taken initiatives such as Debt Recovery Tribunals, SARFAESI Act, IBC, etc, but they have not yielded the desired results and therefore ultimately banks were forced to write off those loans resulting into huge losses,” he said. This shows that it is not the nationalisation of banks that has failed but wilful default by corporates and big business houses have dragged banks into this crisis, he added.

“Even under the Insolvency and Bankruptcy Code, while bad loans have been resolved and banks could get back some portion of the loan, it has been with huge haircuts for the banks,” he said.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)

- Advertisement -

More articles

- Advertisement -

Latest News