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People's convention calls for merger of Lord Krishna Bank with a public sector bank

Staff Reporter

RBI probe sought into decision to merge LKB with Centurion Bank of Punjab


  • MP flays Union Government's new merger and acquisition policy in banking sector
  • Says new private banks are only interested in collecting deposits
  • MLA says he will move a motion in Assembly seeking intervention of State Government

    Kochi: A people's convention held here on Saturday against the merger of the Lord Krishna Bank (LKB) with the Centurion Bank of Punjab demanded scrapping of the decision and urged the Union Government to take steps to merge the bank with one of the public sector banks.

    The convention also urged the Reserve Bank of India (RBI) and Union Finance Ministry to conduct an inquiry into the circumstances leading to the decision to merge the bank with the Centurion Bank of Punjab.

    Inaugurating the convention, Sebastian Paul, MP, said the banks founded in State were fast disappearing through merger or acquisitions. In fact, it was akin to a big robbery. By merging with the banks outside the State, a large chunk of deposits collected form the State was utilised for the service of big business enterprises outside the State.

    Mr. Paul said that the Union Government's new merger and acquisition policy in the banking sector would only strengthen the private banking sector and thereby allow the entry of foreign banks. He said the new generation private banks did not do any people-oriented services. They did not help the poor or farmers. They served only for the big corporate sector.

    Speaking at the function, K. Babu, MLA, said that he would move a motion in the next session of the Assembly seeking intervention of the State Government in the issue.

    He said the new private banks were only interested in collecting deposits. They did not show any interest in distributing loans or advances to farmers or small-scale industrialists in the State.

    Thampan Thomas, national president of the Hind Mazdoor Sangh, said the merger issue called for more discipline on the part of the Union Government in economic matters.

    `Against investors'

    A resolution adopted at the convention said the decision to merge the bank went against the interests of investors and people of the State. The decision would end the people-friendly nature of the banking service. It noted that the Centurion Bank of Punjab had 73 per cent foreign capital. Faced by losses, the Bank of Punjab was merged with the Centurion Bank. After the merger, the bank would look after the interests of big corporate sector and close down the rural branches. Besides, contract labourers would replace the permanent employees. It would also end the social development services of the bank.

    RBI failure

    The resolution said there had been utter failure on the part of the RBI and the Union Finance Ministry in supervising the affairs of the Lord Krishna Bank. The resolution demanded a probe into the RBI action in allowing persons who had other business interests to continue as shareholders of the Lord Krishna Bank.

    Prof. Aravindakshan, Mundakkayam Sadasivan, Nedumbassery Ravi, K. Vijayan Pillai, N. Nagaresh, V.P. George, and C.R. Neelakandan, were among those who spoke. V.J. Johnny, State convener of the forum, presided over the convention.

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