Aftab Ahmed and Swati Bhat

India’s government has shortlisted four mid-sized state-run banks for privatisation, under a new push to sell state assets and shore up government revenues, three government sources said.

The four banks on the shortlist are Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India, two officials told Reuters on condition of anonymity as the matter is not yet public.

Two of those banks will be selected for sale in the 2021/2022 financial year which begins in April, the officials said. The shortlist has not previously been reported.

The government is considering mid-sized to small banks for its first round of privatisation to test the waters. In the coming years it could also look at some of the country’s bigger banks, the officials said.

The government, however, will continue to hold a majority stake in India’s largest lender State Bank of India, which is seen as a ‘strategic bank’ for implementing initiatives such as expanding rural credit.

Modi’s office initially wanted four banks to be put up for sale in the coming fiscal year, but officials have advised caution fearing resistance from unions representing the employees.

Bank of India has a workforce of about 50,000 and Central Bank of India has 33,000 staff, while Indian Overseas Bank employs 26,000 and Bank of Maharashtra has about 13,000 employees, according to estimates from bank unions.

Bank of Maharashtra’s smaller workforce could make it easier to privatise and therefore potentially one of the first to be sold, the sources said.

The actual privatisation process may take 5-6 months to start, one of the government sources said.

(This is an extract from the article. Article courtesy: The Wire.)

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Press Release, 19 February 2021

Protest Against Proposed Privatisation Of Banks

All India Bank Employees’ Association

• Protest Dharna By Bank Unions In All State Capitals Today Against Proposed Privatisation Of Banks
• 2 Days Continuous Strike On 15th And 16th March, 2021
• We Will Go For Longer Strikes If Govt. Proceeds

Against the decision announced in the Budget that 2 public sector banks will be privatized, 10 lacs of bank employees and officers under the banner of United Forum of Unions consisting of 9 unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW, NOBO, are on agitation.

Proposed Privatisation of Public Sector Banks – WE OPPOSE

1. After independence, when our country was suffering from lack of development, the then private banks did not come forward to help in economic development.

2. Hence in 1969, major private banks were nationalized. Since then, Banks have made great strides and played a significant role in our country’s development.

• From 8000 branches in 1969, today we have 100,000 branches, many of them in the villages.
• From 5000 crores of Deposits, today PSBs have 91,00,000 crores of Deposits.
• From 3500 crores of advances today, Banks have given 60,000 crores of loans, main to priority sector upto 40%.
• All the Banks are earning profits. From 2010 to 2020, in 10 years, public sector Banks have earned a total profit of Rs. 14,57,000 crores.

3. The only problem facing Banks is the bad loans. Most of the bad loans are by the corporates and rich industrialists. Instead of taking action on them, Government wants to privatise and hand over the Banks to them.

4. Even today, we are witnessing the condition of private Banks. So many private banks have collapsed in our country. Last year YES Bnk was in troubled and through SBI , LIC, etc. that Bank was rescued. Recently Lakshmi Vilas Bank, another private Bank came into trouble and it has been given to a foreign Bank. We have seen the problems in ICICI Bank. Hence one cannot accept that private sector banking is very efficient.

5. Only public sector Banks give loans to common people, poor people, agriculture, small scale sector, etc. Private Banks help only the big corporates.

6. Public sector Banks given permanent jobs to young unemployed. In private Banks, it is only contract jobs. There will be no reservation in jobs for SC/ST category employees if banks are privatized.

7. Private Banks will not open Branches in rural area. Only public sector banks have opened thousands of branches in the villages. If Banks are privatized, rural branches will be closed in the name of cost saving.

8. Govt. is claiming that crores of poor people have opened their accounts in Banks under Jan Dhan Yojana. Public Sector Banks with 75% of total Branches have opened 40.50 crores of new accounts but private Banks with 25% of the total Branches have opened only 1.25 crores of Jan Dhan Yojana accounts.

9. Only the PSBs are giving education loan to the poor people. Private Banks give education loan only to the rich customers for foreign study.

10. Bulk of the bad loans in the Banks are by the rich corporates and private business houses. Is it safe to hand over our Banks to them?

11. Total Deposits in banking sector today is Rs. 146 lac crores. This is hard earned public savings. We cannot allow private hands top play with this huge public savings.

Hence privatisation is a bad idea.

If the Government is serious about economic development, public sector banks should be strengthened. In public interest, in people’s interest, in country’s interest, we oppose privatisation of public sector banks.

After today’s Dharna , there will be protest programmes throughout the country for the next 15 days. On 10th March, 2021, we will hold a protest demonstration before Parliament during the Budget Session. Thereafter, 10 lac employees and officers of the Banks will observe two days continuous strike on 15th and 16th March, 2021.

If Government proceeds further, we will intensify the agitation and go for prolonged strikes and indefinite strike.

We demand of the Government to reconsider their decision.

(Statement by: C.H. Venkatachalam, Gen Secretary, All India Bank Employees’ Association. Web: www.aibea.in.)