Nine lacs employees of public sector banks (PSB) of India were on a two-day nationwide strike against privatization beginning on 16th & 17th December, in keeping with our forum The Union Forum of Bank Unions, which has organised the strike says:
"Public sector banks belong to the billions of common citizens of India and cannot be handed over to the recent billionaires."
Yusuf Bhandarkar - Founder CEO of Mumbai Multimedia Studio Appeal to Indian Govt and Ministry of Finance to prevent the privatization of these PSBs - instead strengthen them in order which will fuel India’s progress. In the recent Budget, the Indian Govt has announced their proposal to privatize public sector Banks. Though country attained independence in 1947, it remained backward economically. Basic and broad-based economic development was the necessity of the hour. But unfortunately, the then Banks, which were dead private hands and plenty of of them owned by big industrial and business houses, failed to come to the fore to contribute within the process of development. Agriculture sector, Rural and Cottage Industries, Small Industries and Business, which were the mainstay of our economy and other pivotal sectors of the economy remained neglected. Nationalization of Banks and bringing them under Public Sector became very critical and crucial for giving impetus to country’s growth and progress. In this background, 14 major private Banks were nationalized in 1969 and 6 more in 1980. Bank of India, its Subsidiary Banks, in addition the Regional Rural Banks, and also the nationalized banks became the sheet-anchor of national economic development. Banks started reaching bent on the common masses, bank branches began to be opened in rural areas and remote villages, precious savings of the people were mobilized and brought into banking industry. Hitherto neglected sectors like agriculture, employment generation productive activities, poverty alleviation programmes, rural development, health, education, exports, infrastructure, women empowerment, small scale and medium industry, small
and micro industries, etc. became the priority sector and focused attention of Banks. Class Banking was transformed into Mass Banking and therefore the human and deprived section of society could access, convenient and safe banking services. Economy got boosted and there have been many large strides and achievements within the past 5 decades. Public Sector Banks are the very vehicles of our economy’s growth and development. PSBs became the trustees of people’s savings and therefore the repository and depository of the people’s confidence. Public Sector Banks are the reservoirs to irrigate the economic development in our country. Public Sector Banks contribution to create the country’s self-sufficiency is immense as they played pivotal role altogether revolutions like green, blue, dairy etc. Public sector Banks not only unshackled the farmers, landless labourers and therefore the rural populace from the clutches of cash lenders, but also provided much required credit which made rural India a robust component of country’s economy. Today’s major infrastructural development has the very best contribution from Public Sector Banks. Public Sector Banks are earning huge Operating profits, as can be seen hereunder: Operating Profits of Public Sector Banks – at a glace BUT SEE WHERE THE PROFITS GO???? Year profit Provisions made Published Before Provisions for Bad Loans/NPAs net for Bad Loans 2008-09 45,494 Cr. 11,121 Cr. 34,373 Cr. 2009-10 57,293 Cr. 18,036 Cr. 39,257 Cr. 2010-11 74,731 Cr. 29,830 Cr. 44,901 Cr. 2011-12 87,691 Cr. 38,177 Cr. 49,514 Cr. 2012-13 93,684 Cr. 43,102 Cr. 50,582 Cr. 2013-14 1,27,652 Cr. 63,389 Cr. 37,018 Cr. 2014-15 1,37,817 Cr. 76,837 Cr. 37,540 Cr. 2015-16 1,36,926 Cr. 1,60,303 Cr. - 17993 Cr. 2016-17 1,58,982 Cr. 1,68,469 Cr. - 11,388 Cr. 2017-18 1,55,585 Cr. 2,70,953 Cr. - 85,371 Cr. 2018-19 1,49,804 Cr 2,16,410 Cr. - 66,606 Cr. 2019-20 1,74,336 Cr 2,00,353 Cr. - 26,016 Cr. 2020-21 1,97,463 Cr 1,45,021 Cr. 31,780 Cr. Total Operating Profits within the LAST 13 YEARS 15,97,458 CR PROVISIONS MADE FOR BAD LOANS, NPAs ETC 14,42,001 CR THUS, 90.30 % OF TOTAL PROFITS OF BANKS are ADJUSTED FOR BAD LOANS, NPAs, ETC. Instead of further strengthening public sector banking, the current policies are aimed to weaken PSBs, by starving them of the specified capital, human resources, through disinvestment and proposed privatization. Weakening our public sector banks is unwarranted, unjustified and regressive step. We demand strengthening of Public Sector Banks, by adequate infusion of capital, human resources and strengthened statutory framework to recover of the strain assets. The nationalization of personal banks in 1969 and 1980 are watershed events. This resulted in exponential growth of bank branches; making available much needed funds to the credit starved sectors like agriculture, small, village and cottage industries, small entrepreneurs, share croppers, deprived section of society, liberating them from the slavery to money lenders. Public Sector Banks became pivot on which the progress of the country revolved. Today’s rural/semi-urban India prosperity, infrastructural facilities, industrial advancement and therefore the improved standards of lifetime of human is that the results of the dedication of Public Sector Banks. In the garb of efficiency, and mis-conceived policy to shrug of the responsibility, Government has embarked upon privatization of Public Sector Banks. It is irrefutable that “privatization” neither brings efficiency nor the security. round the world innumerable private banks have failed. it's a myth to believe that only “privates” are efficient. If private enterprises are epitome of efficiency, there shouldn't are any NPAs from large private corporate entities the least bit. The NPAs/stressed assets of the banking system belong to personal large corporate which incontrovertibly, unquestionably demonstrates that non-public enterprises doesn't denote efficiency. Public Sector Banks are nation builders. they need humungous value of assets, and billions of funds with them. it might be irrational and, rather, mischievous and an ulterior motive to put the massive network of bank branches, infrastructure and assets of Public Sector Banks within the hands of personal enterprises/business houses or Corporates. This would incontrovertibly lead to denial of easy, nearby and safe banking to the populace of the country. this might also lead to denial of convenient, economical banking services to the person.
The intent has now been clearly exhibited by the demonstrated actions of the govt. through its discrimination in capitalization, dilution of stake in PSBs, irrational policies encouraging to personal Sector Banks, attempts of privatization, allowing licenses of Small Banks and Payments to non-public corporate, blaming the general public Sector Banks alone for the alarming position of NPAs, showing them in poor light.
Instead of tightening the laws to recover the massive NPAs, laws like Insolvency and Bankruptcy Codes are promulgated forcing hair-cuts upon PSBs within the garb of “NPA Resolution”.
Despite opposition from the trade unions, stakeholders within the banking system, the govt is unrelenting and continuing the misplaced reforms at neck-breaking speed. As important stakeholder in Banking Sector, we owe a pious duty to the citizenry of the country to protect the general public Sector character of Banks so as to make sure safe, economic and simple access of banking facilities, sans exploitation, to the common person of the country and to not place the humungous assets, network of bank branches and lacs of crores rupees within the hands of personal corporate/businessmen and therefore the business houses. Hence, we oppose any ill-conceived reforms in banking space. We have been demanding stringent measures to recover the massive corporate stressed assets which are the reason behind concern to the Banks, including strong recovery laws and taking criminal action against willful defaulters. Government has not exhibited its firm willingness to implement these possible, plausible and implementable measures.
On the opposite hand, Government is seriously continuing the retrograde reform measures ignoring the important menace within the industry i.e. mounting bad loans and therefore the growing list of Willful defaulters. Willful default by large corporate borrowers, imposed hair-cuts through ill-conceived Insolvency and Bankruptcy Code, has resulted in heap of write offs, making dent on the record of Public Sector Banks. This has not only affected the profitability of the banks, but has become an alibi to allege inefficiency. The labor of dedicated bank personnel has been constrained to travel vainly.
There is an urgent, decisive and imperative action to usher in suitable statutory framework to think about willful default of bank loans as “Criminal Offence” as this may alone deter such willful default, consequential NPAs and strengthen Public Sector Banks to enable the country to realize overall development.
Privatization isn't the answer to the issues faced by the Banks, rather privatization would further aggravate the challenges being faced by Banks. It has, therefore, become inevitable for the United Forum of Bank Unions to convey their protest to the Government of India
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