Privatization will take banking beyond reach of common man

The All India Nationalized Banks Officers Federation (AINBOF) has warned that privatization will take banking beyond the reach of common man and will also lead to increase in service charges.

It said privatization will primarily impact the general public only as the social objectives will be lost in the name of profitability. “Service charges will be increased and customers who are able to bear those charges only will be serviced,” the federation said in an official statement. “This will take banking beyond the reach of the common man which was the primary objective of nationalization.”

AINBOF pointed out that though the government’s agenda of privatization started in 1991 immediately after the liberalization, the trade unions were successful in thwarting the ill-conceived moves of the successive governments over the past three decades and maintaining the public sector status.

“Of the many private sector banks that came into existence, today only a handful which were promoted by the financial houses like ICIC, UTI, IDBI, HDFC are surviving and many of the private sector entities that commenced their banking operations after 1990 were either closed or merged,” it said.

While presenting the Budget 2021-22 in February, Finance Minister Nirmala Sitharaman had announced the privatization of PSBs as part of disinvestment drive to garner Rs 1.75 lakh crore. “Other than IDBI Bank, we propose to take up the privatization of two PSBs and one General Insurance company in the year 2021-22,” she had said. “The details are being worked out. I have made the announcement but we are working together with the RBI.”

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The Centre, to facilitate privatization of public sector banks, is said to be working on amendments of two legislations – the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980. Sources said that these Acts led to nationalization of banks in two phases and provisions of these laws have to be changed for privatization of banks.

AINBOF believes that creating public opinion and awareness among the public on the ill effects of privatization will persuade the government to rethink on its agenda. As such, the body is conducting various programmes like street corner meeting, customer meets, wearing black badge and protest masks, posters and banners etc.