The Hindu Business Line : Merger proposals alarm bank union

INTERNAL mergers of public sector banks do not automatically add to strength beyond the total capital and reserve base of the merging entities, according to a resolution passed by the 12th conference of the ongoing Canara Bank Staff Union here.

The conference was concerned over the Union Finance Minister's suggestion that public sector banks should merge on the pretext that it would bring about consolidation and help participating banks transform themselves into global entities.

Growth of deposits depends on the growth in income of working people, self-employed, small traders and the unorganised working class.

This is because, the savings of the working class happens to be the main source of bank deposits. With the fall in real income and increase in inflation, the rates of savings have also gone down.

In such a situation, no Indian bank in the public or private sector can hope to become a global bank.

It can, therefore, be deduced that mergers are just an excuse for initiating steps to contain the operating costs of the banks, which is being sought through drastically reducing the workforce through induction of technology, the resolution said.

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