CPI-M opposes merger of banks, says it is meant to facilitate privatisation

New Delhi [India], Aug 31 (ANI): The Communist Party of India-Marxist (CPI-M) on Saturday opposed government's decision to merge 10 public sector banks to create four entities and said it is meant to facilitate privatisation of nationalised banking sector.
The politburo of the party said in a statement that Modi government's action must be resisted by concerted action of bank employees, trade unions and all democratic forces working together.
"CPI(M) expresses its strong opposition to the decision of the government to merge 10 public sector banks to create four bank entities, thus, reducing the number of public sector banks from 27 to 12. Contrary to propaganda of universal financial inclusion, this will lead to further exclusion of crores of Indians," the statement said.
It said India is already one of the "most unbanked countries in the world" and the government's move will further push the small savings in rural India into the "clutches of sleazy chit fund operators and financial mercenaries".
"Weakening public sector banking is meant to facilitate the privatisation of the nationalised banking sector. The merger will lead to the shrinkage of the network of branches denying accessibility, particularly in rural India," the party said.
It said after the merger of five associate banks with State Bank of India, around 1,000 branches were closed and it is reported that the merger of Dena Bank and Vijaya Bank with Bank of Baroda "will result in the closure of 800 branches".
"This year marks the 50th anniversary of the nationalization of banks. Instead of strengthening the public sector banking system, in people's interest, the Modi government is set upon dismantling it. This must be resisted by the concerted action of bank employees, the trade unions and all the democratic forces working together," it said.
The party said that justification of government for the merger of banks is that they will get strengthened and bigger banks will emerge.
"However, the government policy is to disinvest and lower the state's equity in these banks and bring them down below 50 per cent. After setting up of big banks, this process of privatisation is proposed to be undertaken," the party said.
The party accused the government of covering up the reasons for the problems of public sector banks and alleged that huge non-performing assets have piled up because of large-scale defaults by big corporate houses.
"NPAs have risen fourfold in the past five years and at least Rs. 5.5 lakh crore of loans written off. The public sector banks are being forced to give up a substantial part of the debt through the Insolvency and Bankruptcy Code process. The merger of the banks will not solve the problem of recovery of these loan amounts," the statement said. (ANI)