The amalgamation of 10 public sector banks into four as part of the ‘consolidation plan' from April 1, bulldozing pleas to defer it due to the lockdown is a mega scam, alleged a prominent trade union leader.
All India Bank Employees’ Association secretary B.S. Rambabu told The Hindu on Monday that the Centre and the Reserve Bank of India were in a hurry to complete the merger process even as the country was in the grip of fear due to the COVID-19 pandemic.
He said two years ago, subsidiaries of the State Bank of India were merged and subsequently, 9,000 branches were closed and 12,000 employees sent home under the Golden Handshake Scheme.
‘Political interference’
Mr. Rambabu, who is general secretary of the Andhra Pradesh Telangana Bank Employees’ Federation, said there was no necessity for merger when Andhra Bank and other banks were functioning efficiently serving regional aspirations. The losses suffered by some of the banks and the subsequent non-performing assets (NPAs) were due to political interference and the ‘pro-corporate’ approach of decision makers .
“There’s no particular criteria followed for merger, though the stated goal is making the banks globally competitive,” he alleged.
Mr. Rambabu said going by past experience, the current round of merger in the backdrop of lockdown and prolonged slowdown might lead to massive loss of jobs in the banking industry and reduction in capital base due to NPA waiver.
He said now the PSU banks had an outstanding NPA of ₹7 lakh crore. With the reference of the National Company Law Tribunal (NCLT) , bad debts were being written off with mala fide intentions. Terming it ‘legal looting,’ he cited how how Bhusan Steel was sold to a private group for ₹35,000 crore as against the outstanding amount of ₹58,000 crore. Pressure was brought on a consortium of 11 banks to accept the deal, he alleged .
