Hail!

Bank Nationalisation Day – 19 th

July, 1969
Hail! 51 Years of Glorious
Contributions by Nationalised Banks
NATIONALIZATION EMPOWER
PEOPLE
PRIVATIZATION ENSLAVES PEOPLE
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Dear Comrades
We are hailing and observing this Nationalisation day of the banks, with
renewed vigour at a crucial and critical juncture in the annals of our Bank union
movements when an impending danger awaits Bank employees. The
Government is on the prowl after stepping up moves in a break neck speed for
dilution public sector Banking, further liberalize our Banks, encourage private
sector and foreign Banks and FDI amending the Banking Regulations Act and
Banking Companies (Acquisition and Transfer of Undertakings) Act, closure of
loss making rural /semi urban /urban branches, outsourcing,., and above all
thrusting of anti-employees recommendations of the Khandelwal committee.
We should be geared to take our cudgels against the above onslaughts unleashed
by the defence of Nationalization and opposing the current baby moves of
privatization of banks after ill-advised move of consolidation.

EARLIER EXPERIENCE
India's industrial houses have in the past run banks, or worked in close
association with banks. In 1951, when India embarked on the process of
planned development, there were 566 private commercial banks, many of which
had their origins in industrial houses. These banks, however, concentrated their
operations in urban areas and largely catered to the upper sections of the
society. In addition, the business models of many private banks were not
sustainable, resulting in bank failures. On an average, 40 banks failed in India
each year between 1947 and 1955. Liquidation and amalgamation of the private
banks to protect the depositors' interest brought down their numbers. By 1967,
the number of banks had declined to 91 with 6,982 branches. Further, to align
banking activities with planned development and promote inclusive banking,
some of the bigger private banks were nationalized in two phases in 1969 and
1980. Thus, the number of private banks has significantly reduced over time.
Prior to nationalisation most of these banks that had existed were the offshoots
of local landlords/Maharajas or big traders and moneylenders who sought to
extend the scope of their financial activities. Most were in a state of collapse,
due to irregularities and take-overs by the PSB’s and mergers saved them from
default of depositor’s monies. Needless to underscore that but for
Nationalization of Banks, around 70 private Banks since 1961 which have been
merged to Nationalized Banks would have crumbled like cookies bamboozling
the depositors’ hard earned savings.
Bank nationalization was not only necessary to bail out the collapsing private
banks; it was a key necessity to give the necessary fiscal push to an economy
that had reached the end of its tether. Post Nationalisation, branch expansion of

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public sector banks got a boost. The share of rural and semi urban branches in
the total branch network improved from 63 per cent in 1969 to 78 per cent in
1985. However, in the next two decades (1985-2005), the process of branch
expansion slowed down considerably. Further, the proportion of rural and semi-
urban branches declined gradually from 79 per cent in 1985 to 69 per cent in
2005.
Financial inclusion formed an important plank of the inclusive growth theme of
the Eleventh Five Year Plan. There has been renewed interest in branch
expansion. The challenge of financial inclusion is formidable, as there are
around six lakh villages and RBI data on financial inclusion suggests that
including regional banks’ outlets in rural locations reached over 52,000 at the
end of March 2019, a growth of mere 3% over 2018( the figure come down
from93,659 in 2012 due ot closure of many branches under guise of non-
viability/profitability ) ) .only nationalized banks are endeavoring to achieve
the same with all earnestness and seriousness it deserves. Not only the poor,
even the big business which required massive investments in infrastructure if it
was to grow benefited greatly because of nationalization of banks Lack of
infrastructure and capital was leading to stagnation and decline. Nationalization
and the expansion of banking, was a necessary factor, to systematically tap the
people’s savings in order to generate the necessary capital. There was is a sharp
increase in the share of rural areas in aggregate deposits and credit. In fact, a
major achievement of the banking industry after nationalisation was a decisive
shift in credit provision in favour of the agricultural sector. From an extremely
low level at the time of bank nationalisation, agriculture’s share of credit rose to
a peak of about 18 per cent by the end of the 1980s.

Before and after Nationalization

Before 1969 Now
Total bank branches 8262 India has the highest
number of bank branches in
the world. According to
IMF data for 2015 there are
over 1.2 lakh bank branches
in India, followed by China
and Colombia with over
95,680 and 94,074 bank
branches respectively. RBI
data for the June 2016
quarter shows India now has
over 1.3 lakh bank
branches( despite reduction
in interest rates periodically)

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 Total Staff 2,20,000 Around 10 lacs despite
freezing of recruitments
since 1991
Total Deposits Rs. 4646 crores 1,897.822 USD bn in Mar
2020.
Total Loans & Rs. 3599 crores Rs 72.59 lakh crore (US$
Advances 1,038.76 billion) in FY19. ...
As of FY20, total credit
extended surged to US$
1,936.29 billion. During
FY16–FY20, deposits grew
at a CAGR of 6.81 per cent
and reached US$ 1.90
trillion by FY20.
Credit to agriculture Rs.162 crore . 13, 25,824crores The total
number of new farmers
brought under the banking
system to 127.26 lakhs.
Other Important Comparisons
Before 1969 Now
2% of total branches were in 40% of branches are in rural/semi-urban
rural areas. areas.
Bank deposits siphoned off to A greater portion of deposits are
industrial houses as cheap channelised to rural credit.
credit.
One hundred bank directors This figure came down drastically.
were also sitting directors in
about 1000 companies.
No reservation for SCs & STs. Reservation/roaster policy implemented in
full
Public money siphoned off Public money siphoned off through loan
through benami landing. write-offs.
Names of defaulters and those The same is the situation even now. The
whose loans were written off banks are not answerable to the Parliament.
not for public scrutiny under Comptroller and Auditor General has no
banking secrecy. jurisdiction over government bank accounts
shrouded in secrecy.

IMPORTANT HIGHLIGHTS.

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 In August 2014, Narendra Modi launched the Pradhan Mantri Jan Dhan
Yojana which was operated by the Banking Department of the Finance
Ministry which meant that public banks were bound to comply with its
orders. At the inauguration stage itself, 1.5 Crore bank accounts were
opened under this scheme, which was declared by the Guinness
World records to be the world’s highest achievement in this
domain. Guinness’s Certificate declared that "The most bank accounts
opened in 1 week as a part of financial inclusion campaign is 18,096,130
and was achieved by Banks in India from 23 to 29 August 2014". By 1
February 2017, over 27 crore bank accounts were opened and almost
₹66,500 crores were deposited under the scheme and both figures have
gone up since then

The Deposits under Pradhan Mantri Jan Dhan Yojana (PMJDY)

increased to Rs 1.28 lakh crore (US$ 18.16 billion) during the week
ended April 8, 2020. As of November 2019, there were a total of 19
million subscribers under Atal Pension Yojna.
Rising income is expected to enhance the need for banking services in
rural areas, and therefore, drive the growth of the sector.
India has the highest number of bank branches in the world. According to
IMF data for 2015 there are over 1.2 lakh bank branches in India,
followed by China and Colombia with over 95,680 and 94,074 bank
branches respectively. RBI data for the June 2016 quarter shows India
now has over 1.3 lakh bank branches

India not only has the highest number of commercial bank branches in the
world, the number of bank branches in rural and urban areas is almost
equal
After the demonetisation of Rs 500 and Rs 1000 notes, the country's
banking system is going through the ultimate stress test. With long
queues and bankers working overtime, the efficiency of the system is
under the scanner. But if one looked at the numbers, India's network and
distribution of bank branches is quite commendable. Here are some
figures that will put things in perspective.
1. India has the highest number of bank branches in the world. According to
IMF data for 2015 there are over 1.2 lakh bank branches in India,
followed by China and Colombia with over 95,680 and 94,074 bank
branches respectively. RBI data for the June 2016 quarter shows India
now has over 1.3 lakh bank branches.
(Data: IMF)
1. There’s an almost even distribution of bank branches in rural and urban
areas. The overall spread between the rural, semi-urban and the urban
(including metropolitan) areas is fairly even. While over 38 per cent of

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 all bank branches are concentrated in urban areas, nearly 34 per cent are
in the rural areas, with the remaining in the semi-urban areas.
(Data: RBI, June 2016)
2. Of the 47,443 bank branches in the rural areas over 73 per cent is
constituted by regional rural banks and nationalised banks. Both the SBI
group and nationalised banks have just over 30 per cent of their bank
branches in rural areas, and over 40 per cent in urban areas. Private
sector banks largely cater to the urban and semi-urban population with
over 80 per cent bank branches concentrated in these areas.
(NB: Nationalised Banks, RRB: Regional Rural Banks, SFB: Small
Finance Banks, LAB: Local Area Banks | Data: RBI)
3. Despite this feat, India has far fewer banks compared to its population
size. There only 13.54 bank branches per 1 lakh adults. Colombia, with
257.69 bank branches per 1 lakh adults, tops this list. Among our
neighbouring countries, Sri Lanka has better reach with nearly 18.58
bank branches per 1 lakh people. China, Pakistan and Nepal have around
8 bank branches per 1 lakh people, and Myanmar has the least with just
3.3. India has 42.54 bank branches per 1,000 sq. km. China, given its
vast geographical size, has just over 9.5 bank branches per 1,000 sq. km.

4. While the proliferation of bank branches in rural and urban areas is

almost
equal, the number of branches per lakh adults in rural and semi-urban areas
is far less. This is obviously because a majority of the country, more than 80
per cent, resides in the rural and semi-urban areas. According to a December
2015 RBI report, while there are 18.7 bank branches per 1 lakh adults in
urban areas, there’s just 7.8 branches per 1 lakh adults in rural and semi-
urban areas.

FM on consolidation

5...The consolidation exercise is aimed at creating only a few but strong

banks to support the rising credit appetite of the economy, help reverse a
slide in economic growth and cut costs through greater synergy. Citing an
example of the merger of Dena Bank and Vijaya Bank with Bank of Baroda,
FM , after the Cabinet meeting this month, had said the operating profit of
the resulting lender had improved and retail loans were sanctioned in 11
days on an average as compared to 23 days earlier. The amalgamation
exercise comes at a time when non-food credit data showed growth crashed
to just 6.3% year-on-year in the fortnight through February 14, the lowest
since May 2017. In the December quarter, the outstanding advances of the
10 amalgamation candidates dropped to just 3.9% year-on-year, against
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 6.8% of SBI and about 7% for scheduled commercial banks, with some
bankers blaming the uncertainty over the merger deadline for the decline in
credit push at the branch level. Since the Cabinet clearance has ended any
uncertainty about the timing of amalgamation, credit flow in some of these
banks is expected to improve now-Financial Express Bureau  March 13,
2020

PERFORMANCE OF PSB EVEN DURING COVID 19 DOWN CRISIS PERIOD

 PSBs Lead In Disbursing Loans To MSMEs Under Credit Guarantee

Scheme
 The bulk of the disbursed amount -about two-third- was contributed by
public sector banks-Business standard June 03, 2020,
 PSBs Sanction Loans Worth Rs 10,362 Cr Under Emergency Credit
Scheme
 June 07, 2020, Sunday
 PSBs Disburse Rs 8,320 Cr Loan To MSMEs Under Emergency Credit
Scheme
 During March-April 2020, PSBs sanctioned loans worth Rs 5.66 trillion
for more than 4.18 mn accounts. These borrowers are from MSME, retail,
agriculture & corporate sectors, waiting for disbursal soon after lockdown
lifts. Economy poised to recover! FM said in a tweet.

 More than 27 lakh customers contacted from March 20 and 237,000 cases
san Banks bat for package for beleaguered aviation, hospitality, realty
sector Business standard - June 07, 2020 Business standard

From the above one can draw inference that hitherto neglected sectors have
become priority sectors after nationalization. The objective of Financial
Inclusion has gained requisite momentum and growth mainly because of public
sector banks efforts to reach large hitherto un-served population of the country
to unlock its growth potential. In addition, only PSB’s in the country has strived
towards a more inclusive growth by making financing available to the poor in
particular Thus nationalization of Banks ushered in a new era and transformed
class banking into mass banking. Public Sector Banks have become instruments
of broad-based economic development and today 85% of the banking sector is
in public sector. In sum, public ownership of banks, besides preventing the
system from periodic crises caused by the behaviour encouraged by the pursuit
of private profit, delivers many growth and welfare benefits.

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There are certain enterprises that do not lend themselves to privatization either
through the inefficiency of duplication, e.g. not a good use of resources to have
two roads running in parallel, or two water systems to your house or because
something that is inherently a public good does not lend itself to private
competition, e.g. banks insurance the court system, police, national defence
.
Privatization is problematical because it involves the public paying for a
function, but not having direct control. This presents a management problem
that is wide open to abuse if not carefully monitored.
So like most things in life, it depends…

There is no substitute for vigilance

There were scams in private sector banks -Global Trust Bank Ltd ,,Lord
Krishna Bank Ltd were closed and merged to other banks in the past

Govt owns huge capital investment in these banks and the capital is way higher
than actual market worth. For instance SBI has a market Capitalization of Rs.
2.67 Lakh Crores or Rs. 2.67 Trillion. The Govt owns around 62% or Rs. 1.64
Trillion worth of Shares. However 5 Independent agencies have valued the
Market Cap to be worth between 1.08–1.14 Trillion if Govt relinquishes its 62%
stock to the market and this would mean a Market Cap fall of Rs. 0.56 Trillion
which is huge. Same with all other banks.
So GOI selling its stock to private persons means a huge discount which would
be financially disastrous. It is why Air India Privatization plans remain at
ground level. Nobody is offering to buy the Company at the present price. They
prefer at least 40% discounted price which would mean huge issues.

Secondly - Privatization is not always a good thing. In a country like US - the

Private Sector is well developed and has laws that have been around for 140
-170 years. Private Sector has been developed and enterprise has been around
since 1776. However in India- Private Sector is still relatively new (1995-) and
is extremely unstable and top heavy with mismanagement in most cases [Global
Trust Bank, East West, Damania, Kingfisher, Jet Airways, Reliance
Communications, STNDL, Aircel, Infocomm, Datatel]. To allow private
individuals control of the banking where 85% of our retail accounts, savings
and investments are present would be suicidal. Imagine if people like Nirav
Modi or Anil Ambani were in charge our savings and investments. They could
blow away our money on outside projects or filling up other holes. Right now
there is a huge level of safety that Govt of India is safeguarding our money -
and it is safe as houses.

True there are private banks like HDFC or ICICI but even they are tightly
regulated. The retail funds available with these banks is very little compared to

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the PSU Banks, but once PSU banks are privatized - the retail funds would all
be in private hands. Today an individual may have an account with ICICI and
SBI - so that he can call ICICI the riskier account but tomorrow everything
would be riskier.

If India had US Courts or a US Justice System where Swift Justice would be

delivered or if Indian Population were like Americans - inured to financial
disasters and subsequently better informed than fine - but we have neither - we
have a presently ridiculous Supreme Court and a Snail paced Judicial System
and we have been comfortably spoon fed by GOI for 70 years. Sudden
Privatization would be a huge disaster and any economic crisis may result in
revolutions.

Thirdly - there are the Loss making Black Hole giants like SAIL, Coal India,
Hindalco, Air INdia which guzzle hundreds of crores every year from PSU
Banks. Once they are privatized - the Individuals in charge will simply refuse to
extend or grant such loans and GOI will be in deep trouble. For instance Coal
India has 38732 Crore outstanding and based on its current profitability is
valued outside at around 55% of what GOI values it. Air India has 25400 Crores
outstanding. All these loans are granted by PSUs because GOI have 62% stake
and can call the shots. Otherwise - Banks will simply pull the stops - so where
will GOI get the money from to run these black holes? They will have to sell the
black holes and nobody will pay more than 50% of the cost.

So this will again lead to huge losses, economic losses and a huge divide
between rich and poor as the same Ambanis, Adanis will purchase these banks
and black holes, become richer and richer while we public remain at the same
level
So Privatization if at all must be very gradual and should start as Divestment
like Shouries proposal (Although ONGC has not quite panned out).
Sweden, Norway, Denmark all have Government owned GOS which are highly
successful so why not India?

An examination of the main arguments extended to build a case for

privatisation of the public sector banks (PSBs) in India reveals that the
arguments are based on (a) perceptions rather than factual analysis; (b) the
use of partial information; and (c) evidence on international experience
which is not unambiguous. It can be concluded that the case for
privatisation of PSBs in India is not strong enough at least on the grounds
usually proposed by the advocates of privatisation. Private sector banking
would have a larger probability of crisis if the supporting legal and
regulatory framework were not sound enough to insulate the systems from
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extraneous pressures. It may, therefore, be safer to maintain the public
sector character of the banks till the conditions for privatisation are
conducive enough.

One cannot turn nelson eye to the following irrefutable facts. highlighting the
utter failure of privatization

The collapse of the mighty global financial system has triggered a series of
chain reactions in India, but the experts report that the impact is not going to be
as widespread as earlier imagined. The reasons are numerous.

First, the subsidiaries of collapsed investment banks like Lehman are being
bailed out by entities like Nomura of Japan. This includes the 2,500-strong back
office operations in Mumbai, apart from the smaller securities set up. Similarly,
American Insurance Group (AIG) in India has a tie-up with the ever-reliable
Tata’s who have given a thumb up to all consumers who were worried about
their insurance carried out through this vehicle.

Second, and even more significant, is the fact that the slow pace of
implementation of reforms in the financial services sector due to strong
resistance from united movement of Bank employees has ensured that the
tremors of earthquakes in the US are being felt minimally in India.

the regulators for the pension, insurance and other similar sectors concluded
with a sigh of relief and pronouncement that slow and steady opening up of the
economy has helped in the long run. This is not to say that capital account
convertibility - or making the rupee freely tradable - will not take place. But
probably as the regulators have pointed out, that can happen when the economy
is at a more mature stage.
Ultimately, therefore, the big losers in the global financial crisis in our country
were the iconic software firms like Infosys, Wipro and Tata Consultancy
Services (TCS). Much of their business comes from the erstwhile giant
investment banks and that could affect their profitability in the short term. In the
medium-to-long term, however, these companies are likely to have greater
resilience given their innovative approach in the past to hunting out new
markets and customers.
The other area where worries still remain is the pullout of funds by foreign
institutional investors from the country's equities and debt markets. The bourses
have been showing considerable volatility ever since the news came in about the
failure of Lehman and the domino-like effect on other investment banks.

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While the Indian stock markets became volatile, they have not crashed as might
have been expected initially. They now seem to be stabilizing as safety nets are
being created for collapsed banks, like converting Goldman Sachs and JP
Morgan into commercial banks while other banks are picking up some entities
cheap like the takeover of Wachovia by Wells Fargo.

As far as the US and even Europe are concerned, the ramifications appear to be
unending as the scenario is unfolding into the biggest banking crisis in 100
years. Financial institutions considered to have a rock-like stability including
Merrill Lynch, Morgan Stanley, JP Morgan and the Lehman Brothers collapsed
within days of each.
Some were rescued through various manoeuvres and only Lehman actually
declared bankruptcy. Reports reaching us also indicate that many smaller banks
are declaring insolvency in the US - a development not being taken note of by
the international media, which is focusing on the big fish. Thus average people
in the US are facing severe hardship. No wonder then the battle is being
described as one of Main Street Vs. Wall Street.

The complex set of circumstances that created the crisis are a fascinating story
of greed and over-reach at the highest level of the financial system in the US.
The solutions being found are even more fascinating - at least in India. The US
administration actually bailed out mortgage giants like Freddie Mac, Fannie
Mae and the world's biggest insurance company, AIG. The bailout has resulted
in the government taking a majority stake in these institutions including an 80
percent equity share in AIG. In other words, the US is doing what we in India
call Nationalisation

The irony has not been lost on those in the banking industry in this
country. Former Prime Minister Indira Gandhi was roundly condemned
by the US and other Western powers when she nationalised banks in our
country in order to ensure that credit reached the poor and powerless.
Deemed to be a socialist - or communist-like measure -, it has now been
adopted without any qualms by the avowed world leader of free market
economies. It seems the US government had little choice, as otherwise
widespread mayhem may have resulted for the average citizen both within
US and abroad.

In the case of AIG especially, it was recognized that the sudden collapse of the
largest insurer in the world would wreak havoc globally. Besides, the timing of
these events could not have been worse for the Bush administration as the
presidential elections are just weeks away. It thus had little option but to carry
out damage control as rapidly as possible.

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Clearly the rules of the game change for Western economies during crisis.
Nationalization can be resorted to when the American people need to be
protected but the same measure can be decried when a developing economy
needs to do so to similarly protect its far more impoverished citizenry.
The nationalization of banks in India opened the way for ordinary people to use
the financial system for small and tiny deposits. It paved the way for what is
known as compulsory priority sector lending. In other words, banks had to
provide a certain amount of credit for agriculture and rural areas. In the normal
course, commercial banks only lend to sectors providing assured and fairly
high returns. But Nationalised Banks in India have a social obligation to
fulfill and the directive to do so was made possible only by the drastic takeovers
effected by Indira Gandhi in 1969. Bank nationalization was also necessary to
bail out collapsing private banks, it was the key necessity to give necessary
fiscal push to an economy that has reached end of tether. Needless to
underscore that but for Nationalization of Banks, around 70 private Banks since
1961 which have been merged to Nationalized Banks would have crumbled like
cookies bamboozling the depositors’ hard earned savings.
Apart from banks, many other industries had to be nationalized to prevent
millions of workers from becoming jobless. The perennially loss-making
National Textile Corp is one such case when the government had to step in
as private mill owners were closing shop and leaving their workers in the
lurch. Though the corporation and its regional subsidiaries have rarely
made profits, the mills under its charge have also performed a social
obligation by producing cheap cloth meant for weaker sections of society.
Nationalization is the only way out to save people’s savings, jobs in a
country without any social safety nets for the jobless.
So there can be few tears shed in India for the plight of the US economy. Our
focus should only be on how to deal with the fallout of the financial disaster that
has overtaken the global bastion of free markets.

Comrades, the collapse of the 158-year-old American investment bank Lehman

Brothers Holdings is the world’s biggest ever bankruptcy story. It has sent
thousands of its employees flocking the job market and pushed the global
financial markets into a downward slide.

The US government has come up with a $700 billion package (Indian budget
for 2008-09 is $185 billion) to stem the rot. The financial rescue packages
totaling over a trillion dollar, including the latest $700-billion plan, and the
government’s expected move to buy shares in some banks, are expected to
further inflate the country’s debt levels. With an estimated population of about
315 million, this results into an average debt of close to $34,000 for US law-
abiding citizen. It is a little like surgery. The US government has amputated
the gangrenous leg of the banking system to save the patient. But it is now

12
preparing to graft the infected limb on to the body politic of America. The US
taxpayers will be lucky if they do not feel distinctly unwell as a result of this
little experiment. It is a sad day when hard-pressed citizens find themselves
subsidizing private banks for their stupid mistakes. But what is happening in the
US, will surely be done here.

Thanks to the modicum of democracy still operating in the country and fear of
public opinion, the Government has found it difficult to accept the suggestion of
outright privatisation of the banking system. Therefore, some surreptitious
devices of back-door denationalization have been adopted. The entire system is
being turned topsy-turvy without any comprehensive study, except for the
report of some committees, which are tailor-made to secure financial sector and
structural adjustment loans from the multilateral agencies.

While day in and day out, the Finance Ministry is assuring the people in the
context of global financial crisis that Indian Banks are safe, but they are not
honest enough to emphasize the truth that 85% of the Banking in India is done
through Public Sector Banks and it is because of Nationalised Banks that the
crisis has not engulfed in Indian Banks.

But today, in the last more than a decade, Government is trying to foist the
reform policies in the banking sector – attempts to privatize the Banks, to
reduce the Government’s equity capital in the banks, enhancing the cap on
voting rights of shareholders, to sell the capital to private hands, to consolidate
the banks in the name of meeting the challenges of globalization, to allow
unrestricted FDI in banking sector with full voting rights. These policies are not
in the interest of our nation, not in the interest of the people, not in the interest
of public sector banking. Rather these are naked attempts to reverse the clock
back. These are actions which will defeat the basic objectives of bank
nationalization.

It has now evidently become clear that the entire institutional structure
assiduously built up over the past four decades after bank Nationalisation is to
be subverted to serve the interests of a small section of Indian society-in the
name of achieving ‘global competitiveness’. Building a banking infrastructure
reaching the nooks and corners of the country, providing strength and stability
to the system, mobilization of savings and an equitable distribution of bank
credit with a degree of cross-subsidisation of interest rates-these were some of
the avowed objectives of bank Nationalisation. While the efficiency of bank
operations leaves much to be desired, what has been achieved has been

13
unparalleled. The spread of bank branches has made a tremendous difference to
urban and rural economic activity. Any reform of the banking system should
build on the institutional structure that has been created rather than seek to
destroy it as is now being sought to be done.

If the banking system has a role to play in the sectorial and regional
diversification of development (with the two dimensions closely interlinked),
the promotional aspects of continued branch expansion and extension of
financial assistance to the acknowledged priority sectors are as relevant today as
ever. Towards that end, a degree of cross-subsidisation among bank branches
and among lending categories should be the sine qua non of a relevant banking
strategy. However, the system of operation sought to be thrust on the public
sector banks is that of the foreign banks and the proposed private sector banks
with aggressive commercialism as the guiding principle. It is not just modern
technology and automation which distinguished the foreign and proposed
private sector banks; it is the nature of their clientele and their culture of
wholesale and upper class banking.

One of the achievements of the Indian banking system in the post

Nationalisation period has been the immense confidence created in the system
which is an immeasurable asset and which has made it possible to attract
substantial bank deposits despite significant competition from , foreign , new
generation of private banks ,mutual funds and other non-banking financial
intermediaries. Hence Closure of bank branches of nationalized in the name of
efficiency and profits would only mean a waste of social assets already created.

Unfortunately today public policies of the Govt. themselves encourage

predatory activities by participating entities, even if in a remote segment of the
system, all hope of a healthy pattern of economic development may be
discounted. The policy-planners have today provided the foreign banks with a
conducive environment to appropriate unreasonably high levels of profits in
India. In contrast, the Indian banks are in a disadvantaged position in many
respects. They shoulder heavy social responsibilities: rural branch banking,
priority sector advances including DRI, special employment schemes, financial
inclusion ,micro finance, IRDP, schemes for minorities, scheduled castes/tribes
and women, and many others. They face large loan losses from small and big
borrowers.

Today the ideals of nationalization are at the cross roads. The democratic
capitalist ideals of unshackling the small producer from his debt burden has
gone to the oblivion. Gone too are the concepts of welfare state. The banks
cannot survive this onslaught. Our only hope is to build workers’ struggles to
stop this slide.

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In the above context, we the bank employees in the best interest of the banking
industry and for attainment of objectives of Bank nationalization which is the
epitome of social responsibility .we have strike as verb at the root of problems
observing strike action on war footing . At the present stage of India’s
development, given inequality, public sector is the only instrument of policy to
ensure balanced regional development and cross subsidy. Adhoc privatization as
being aimed at by the successive governments in power since 1991 would result
in privatization of profit and nationalization of losses, bonus, and pecuniary
gains to willful defaulters which will be disastrous to the people of this great
Nation. As united,commited employees while we are urging for nationalization
of all private banks, Blade Companies and restriction on entry of foreign banks,
the Government of India, since 1980, has dismantled the institutional structure
assiduously built up over the last 5 decades of Bank Nationalization as a result
of over 5 decades of our struggles, sacrifices, sweat and toil to be subverted to
serve the interest of a small section of Indian Society in the name of achieving
global competitiveness. At the present stage of India’s development, given the
inequality, Public Sector is the only instrument of policy to ensure balanced
regional development and cross subsidy.

Remember! If today people’s money is safe in Indian Banks, and we are

writing about it is only because of stoic resistance of bank employees’ unity
.

Only the ‘unity’ and the united struggles / strikes of Bank employees
against privatisation stands between the forces of destruction and our live
savings, our lives and that of our children.
“WE SHOULD ALWAYS STRIKE AT THE ROOT OF THE PROBLEM”

Yours Comradely
(S.SRINIVASAN)
FORMER GENERAL SECRETARY
All India Overseas Bank Employees’ Union (AIOBEU)
19-7-2020

BANK EMPLOYEES’ UNITY ZINDBAD!

WORKING CLASS UNITY – ZINDABAD!

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