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Bank unions protest over merger moves
Bank employees of all the banks got together and marched to Bank Street to show their strength in defying the mergers that the government plans
Hyderabad: Bank employees of all the banks got together and marched to Bank Street to show their strength in defying the mergers that the government plans. More than 10 lakh bank employees and officers under the banner of United Forum of Bank Unions (UFBU) went on strike on. The strike call has been given against merger of banks as the UFBU feel it is unwarranted and not beneficial to the economy and people at large. It will also affect the interests of employees. Last year six banks were merged with SBI.
The fear among bank employees is that, mergers would result in closure of banks. Ravi, a banker said, “Instead of mergers, more banks should be established. There are thousands of villages where there are no banks.” Compared to many countries of the world, banking density is relatively low in India and hence there is huge scope and need for expansion of banking industry. There is no need for consolidation. There are thousands of villages where banks have not reached. There is huge exclusion of people. Hence, banks need to be expanded. There is no need for consolidation. The number of banks in USA with just 323 million populations is far more than banks in India with a population of 1.35 billion. India is not overbanked. There is no need for consolidation.
Because banking has not reached all people, the government had launched ‘Jan Dhan Yojana’. Now they have launched ‘Jan Dhan Yojana II.’ This means, banks have not reached all sections of people. There banks need to expand their services. Mergers will result in shrinkage of banking. Hence there is no need for mergers. Mergers are proposed to make our banks bigger to cater to increasing demands for large-sized loans. Bigger the loan, higher the risk. Already banks are suffering from corporate default, he said.
Hence, banks should not be made bigger by merging them. Mergers are not needed. Government argues that banks would become stronger by mergers. There is no evidence to this conclusion. To resolve the problem of bad loans facing the banks and the government should take tough measures to recover the bad loans. Instead of that, the government is trying to divert the attention and focus by resorting to merger of banks, said Ramu, an employee of Canara Bank.
