Privatization of Banks – preview

Sima Ghosh, Ex-bank Officer, IDBI

India starts nationalisation of banks on 1969, to cope with economic unrest of this newly independent country. It was the need of the hour to protect its people from vicious circle of poverty, trap of money lenders and to develop a strong economic base for the country. Nationalised banks are like pillars of Indian economy, it lend farmers, industrialists, young entrepreneurs as well as big corporates which may ultimately be a developed country.     All government welfare projects, even tax and revenue collections, distribution of government aids – all are carried out by nationalised banks only. PM’s motto, ‘sabka sath sabka bikash’ programme to extend banking facilities to all, to offer zero balance bank accounts also become successful with nationalised banks only, no private bank offers zero balance account to any one.     In the Union Budget 2021-22, Finance Minister announces Government decision of disinvestment of two nationalised bank and one insurance company, namely Life Insurance company of India to raise Rs. 1.75 lakh crores. We can remember this government sold it’s stake in IDBI Bank to LIC, which lead IDBI Bank to be a private bank from it’s original Financial Institution character to contribute to infrastructure development of the country, LIC also sold it’s shares of IDBI Bank and now LIC’s own existence as a core financial institution is also at question.       

Bank employees went to nation wide strike for two days consecutively after two days holidays of banks for second Saturday and Sunday against privatization of nationalised banks under the umbrella of UFBU, a body of nine unions with a  success, though it caused big problems for customers, but it was an utter necessity for bank employees and customers both. Privatization of banks has no contribution to any better customer service, customers have to give huge charges to get service and a weaker section of the society can’t get service from private banks. Last few years, we witnessed the merger of small banks to form one big bank, and that merger hindering service conditions which leads to increased depression among bank employees and reflects in services offered to customers as well. Managements of these merged banks are also suffering from such turmoil. Supposedly, these consolidated banks are safe for the time being, but that guarantees to better working environment for it’s employees. In reality, we can understand that the actual problem with Indian nationalised banks is unrealized loans, it may be loans to farmers, MSMEs or to big corporates. Bad loans or NPA s make a bank sick and most of that bad NPA s are due to big corporates, we all have clear memories of some big shots from the recent past about flying away from the country with huge debts from several banks. Now privatising banks means gifting of public money to big corporates again to add miseries to bank employees and customers. Due to pandemic situation last year, Indian economy is growing downwards, better not mention statistics, economy is squeezed with unemployment. In such situation, privatization of banks must be fatal to the country. Existing private banks have no rural branches, existing arrangements to offer banking facilities to rural areas may not be maintained by private banks, banks are extremely burdened which cause closure or merger of many branches of nationalised banks, and all these must have reverse effects on customer service.  Banks health depends on it’s successful business which comes mainly from lending and servicing of loans. There is no doubt regarding bank employees’ dedication and offering service with a smile to customers, to serve huge customer base and contacting customers beyond their office hour, they have to attend office punctually, but time mentioned to close office, sometimes it prolonged for 12 to 13 hours a day. All such works hinder their family life also, but at the end of the day, what they are getting – threats to their job, working condition, depression and decreasing health conditions. Though our FM assures job security, but not betterment of working environment. They have to do banking, selling of mutual funds, selling of insurance, enquiring and disbursing g loans, recovery of loans, making Aadhaar cards, disbursement for all government aided programme, tax collection and now election duty. They are like economic soldiers for the country but we forget to offer them due respect for their service. Our negligence to bankers will make our banking system weak and offering nationalised banks to corporates who are responsible severe condition of banks is to dig grave for country’s economic back bone. This decision will be fatal for banks as well as for the country and  conspiracy to break bankers dedication. 

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