The Hindu : Andhra Pradesh / Visakhapatnam News : Unions oppose plan to merge public sector banks

Online edition of India's National Newspaper
Monday, Sep 06, 2004

Andhra Pradesh

Andhra Pradesh - Visakhapatnam

Unions oppose plan to merge public sector banks

By Our Special Correspondent

VISAKHAPATNAM, SEPT. 5. Bank unions were opposed to indiscriminate mergers, the Director of the Corporation Bank representing workmen and Vice-president of the Andhra Pradesh Bank Employees' Federation, Ch. Hanumantha Rao, said here on Sunday.

Speaking to reporters, he said several aspects, like loaning patterns and distribution of branch network, must be taken into account while effecting amalgamations and mergers in which the Government was interested. "There is a move to merge the 27 public sector banks into a mere half-a-dozen at the behest of the International Monetary Fund (IMF). Such a step would be detrimental to the interests of workers as well as the industry. We oppose it, though we are not against mergers in general," he said.

`Make defaulters public'

On the other hand, the Government must take action on defaulters as public sector banks were plagued by bad debts to the tune of Rs. 1,25,000 crores, Mr. Rao said. The banks should be empowered to take criminal action on defaulters and declare their names in public, he said. "We are undertaking a nationwide campaign from October 3 on this issue to protect public sector banks. This will be followed by a march to the Parliament in March next year and the presentation of a memorandum to the President of India," he said.

Nationalise co-ops

Mr. Rao said it would be more prudent to nationalise all cooperative banks and private banks, since it would provide assistance to the farm sector more effectively.

It would not be difficult for the Government to support cooperative sector banks, which are run on a small scale, he pointed out.

He said the banking industry was in a crisis, with falling interest rates and lack of security to the deposits by public.

The Government must provide surety to the deposits and be made accountable, as it had a responsibility to prevent private banks from duping the public, he said.

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