Bank unions have voiced vehement opposition to Finance Minister Nirmala Sitharaman’s proposal to privatise state-owned lenders, and have instead demanded for provision of financial support.
The United Forum of Bank Unions (UFBU), which represents nine trade unions of officers and workmen across all banks, said priority-lending and social banking are almost entirely driven by public sector banks (PSBs), with 90 per cent of the accounts under the Pradhan Mantri Jan Dhan Yojana being opened by PSBs.
Be it times of recession, economic shocks, or the COVID-19 pandemic, public sector banks have stood firmly with the nation, without fear of collapse or customer exploitation, the union said.
Driving home its point, UFBU said public ownership in banking is the sole reason for resilience in the financial sector the world over, especially when it comes to rural penetration and financial literacy, which are the stronghold of government-owned banks.
“If Indian banking today stands strong, it is because of resilience built under public ownership...no country in the world has achieved universal banking through privatising banks. To say privatisation will still ensure inclusion is not supported by any evidence,” it said in a statement.
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The union’s statement comes in the wake of the finance minister remarks that supported privatisation of state-owned banks, saying it would not hurt financial inclusion and national interest.
But, the UFBU said privatisation of PSBs has everything going against it – from undermining national and social interest to endangering financial inclusion and threatening job security and public funds.
In fact, said the union, privatisation would benefit corporates, not citizens, which is against the very framework of banking – a social and constitutional responsibility, instead of being a business for profiteering.
Prior to nationalisation, banking only served industrial houses and elite business groups, the union group stated. However, public ownership opened the doors of credit to farmers, workers, small businesses, women, weaker sections, and rural citizens, expanding quickly from a few thousand urban branches to lakhs of public sector banks in the villages.
On the other hand, private banks neither attempted nor intended to serve these regions because rural banking is ‘low profit’, the union added.
“Priority sector-lending, agriculture loans, SC/ST credit schemes, SHGs, rural self-employment, student loans, MSME support, and welfare-linked banking became viable only under public control”, it said.
Demanding a categorical assurance from the Centre that no public sector bank will be privatised, the UFBU said the government should assure it that PSBs would be strengthened through capital support, technological modernisation and transparent governance, albeit without privatisation.
It also requested for public consultation and parliamentary debate before any decision is made that impacts the rights of depositors, employees and common citizens.
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