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Centre urged to expand public sector banks

Special Correspondent

JAIPUR: The All India Bank Officers Association (AIBOA) has asked the United Progressive Alliance Government to consider expansion of the public sector banking system to help the agriculture sector instead of talking about consolidation of the nationalized banks through mergers. The existing 27 public sector banks should be bifurcated to form at least 81 banks synchronizing with the growth of population, the Association said.

"The attitude of the Government in bank policies is certainly retrograde. It reflects an anti-people outlook," Alok Khare, president of AIBOA said here on Thursday on the occasion of its fourth regional conference. If an amount of Rs.1, 05,000 crores, as promised in Common Minimum Programme, is to be given to the agricultural sector, each district should have 80 branches of public sector banks and 10 districts should form a cluster, Mr.Khare said giving his arguments in support of more nationalized banks.

The need of the hour was for cheaper finances to agriculturalists who contribute immensely for the uplift of national economy. The benefits of interest de-regulation, which followed the country's adoption of new International Norms of Income Recognition and profit surplus, had gone only to the corporate sector where the interest rate dipped from 24 per cent to below PLR level. "This is the appropriate time to bring down the lending rate for agriculturalists under priority sector to 0 per cent as it is being done in China," Mr.Khare suggested.

AIBOA warned the UPA Government against the proposed amendments in the Banking Regulation Act, likely to be placed in the coming session of Parliament. AIBOA would oppose any move to remove the cap of voting rights of private investors and also in allowing participation of foreign banks in private sector, Mr.Khare said.

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