Financial Daily from THE HINDU group of publications
Tuesday, Mar 22, 2005
Money & Banking - Trade & Labour Unions
Bank strike today
Mumbai , March 21
THE United Forum of Bank Union, an umbrella organisation of four officers' unions and five workmen organisations, has called for an all-India strike on March 22, to oppose mergers and acquisitions of public sector banks as well as allowing up to 74 per cent foreign equity participation in private sector banks.
More than one million employees and officers from public, private, RRBs and cooperative banks are expected to participate in the strike. The unions have organised protest marches in various cities all over the country. The forum has recommended that private sector banks should be nationalised. Dr S.L. Das, General Secretary of Canara Bank Officers' Union, said, "Private sector banks are concentrating only on corporate loans. If they are nationalised they will be forced to lend money for sectors like agriculture. Though rules exist that recommend priority lending, they are not implemented effectively."
The unions are also opposed to the Government's proposal of merging public sector banks. Instead, they have proposed bifurcating the existing public sector banks.
AIBEA threatens indefinite strike
Our Chennai Bureau reports: In Chennai, the General Secretary of All India Bank Employees' Association (AIBEA), Mr C.H. Venkatachalam, told Business Line that on the issue of opposing mergers among banks "all employees are firmly behind us." He said that although the Finance Minister, Mr P. Chidambaram, had said that he would not force one bank to merge with another, "they are very serious about mergers happening."
Asked if the unions expected to be able to block mergers, Mr Venkatachalam posed, "what will they do if we go on indefinite strike?" He said that all the unions of the banking industry were unanimous on this issue.
He said that the notion of making banks stronger by mergers was "illogical", as size does not necessarily mean strength. "The core issue is NPAs, which are growing year after year," he said, adding that adequate efforts were not being made to recover dues.
He said that the total non-performing loans of the banking sector were well over Rs 1 lakh crore and "even if 10 per cent of it is recovered, it would strengthen the banking sector better than mergers." The AIBEA has brought out a book giving a list of defaulters. The AIBEA has noted that in just one year, 2003-04, additional bad loans of about Rs 25,000 crore were created.
Mr Venkatachalam said that even if all the banks in India were to be merged into one, the merged entity would have assets of $250 billion, compared with $806 billion of Royal Bank of Scotland, which is the last of the top 10 banks in the world.
He said that the AIBEA would continue its "sustained struggle and campaign" against the dilution of Government stake in banks and increased foreign direct investment in banking.
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