Nearly 300,000 employees of state-run banks went on strike yesterday against government plans to consolidate the sector through mergers as part of efforts to ensure stronger balance sheets.
Prime Minister Narendra Modi’s government has vowed to cut the total number of state-owned banks to 12, from 27 in 2017, raising fears of job losses.
Under the current round of squeezing, 10 banks will be amalgamated into four.
“Government may call it a merger but in reality it is cold-blooded murder of six banks,” a release by the bank unions said.
The state-owned banks account for nearly two-thirds of banking assets in the country and also have a lion’s share in the nearly $150bn of soured loans in the banking sector.
The sector suffered from out-of-control lending in 2006-11 when the economy grew rapidly, and has continued to struggle.
Employees stayed away from work across the country and joined in protest marches.
Services such as cash deposits and withdrawals, cheque clearances, ATM operations were affected, according to bank employees.
C H Venkatachalam, general secretary of the All India Bank Employees Association (AIBEA), said the plan was to expand the protest movement to other bank employees as well, taking it up to nearly a million workers to force the government to reconsider its decision.
A senior banker, however, said the protests would not derail the merger plans.
“We have seen that the unions had taken similar steps even in the last round of merger which included the State Bank of India and then in the case of Bank of Baroda but it quietly died down later,” said the chief executive officer of a public sector bank, requesting anonymity.
Meanwhile, the aggrieved depositors of the scam-hit Punjab & Maharashtra Co-operative Bank Ltd found no solution at a meeting with Reserve Bank of India (RBI) officials as the central bank Governor Shaktikanta Das is touring abroad, representatives said yesterday.
A delegation of the protesting depositors, which was called by the RBI for a meeting, was reportedly assured of various options to revive the bank “as soon as possible”.
“However, RBI officials informed the delegation that it was waiting for an internal inquiry report of the PMC Bank which is expected to be submitted by the weekend. That report will be discussed with the governor who is likely to return this week before any final decision is taken,” the PMC Bank Depositors’ Association convenor Vishwas Utagi said.
Though RBI officials said they would be making a media announcement in the matter soon, the agitating depositors set a deadline of October 30 for the RBI after which they would intensify their agitation, Utagi said.
Simultaneously pursuing legal angles, Utagi filed a public interest litigation and a writ petition on behalf of a school in the Bombay High Court.
In another development, a 73-year-old woman in Solapur died on Sunday after her daughter’s savings of around Rs2.25 crore were in the PMC Bank.
Her son-in-law in Mumbai said Bharati Sadrangani had been anxiously calling her family regularly inquiring about the status of the money and had collapsed after suffering a heart attack.
This becomes the sixth PMC Bank-related death in the past 10 days, and many more depositors, especially senior citizens, are under great stress as the crisis continues to drag on, Utagi said.
Meanwhile, scores of PMC Bank depositors held another noisy protest in Mumbai yesterday and have vowed to continue their demonstrations until the RBI or the government takes concrete measures to resolve the crisis.
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