Why to Oppose Bank Privatisation?

✍️Sanjoy Das
(General Secretary)

  1. Bank Privatisation will Weaken the Security of Bank Deposits:
    Individual bank deposits in India around Rs. 87.6 lakh crore in March 2021. Of this, Rs. 60.7 lakh crore,i.e. around 70% were under the custody of the Public Sector Banks (PSBs). Clearly, Indian depositors prefer the safety and security of the publicly owned banks. Bank privatisation would remove the sovereign guarantee behind the banks and make the deposits less safe and secure.
  2. Privatisation will squeeze the credit flow to the small and medium farmers, entrepreneurs,
    businessman.Over 60% of the total credit to the priority sector; i.e. small and marginal farmers, non-corporate individual farmers, micro-enterprises, self-help groups and weaker sections like the SCs, STs and minorities; is provided by the 12 PSBs and the Regional Rural Banks sponsored by them.
  3. Bank Privatisation will deprive Poor & Rural Customers from Banking service as the banking will be very costly:
    As the banking will be shifted from welfare moto to profit making moto the Private players will have
    monopoly in service charge, interest rate, and ultimately the banking service will be out of the capacity of common people. 31% of all PSB branches are in the rural areas. This is because private sector banks cater more to the affluent sections and disproportionately concentrate their resources in the metropolitan areas because of their narrow focus on profitability. Privatisation of PSBs will adversely impact financial inclusion. Bank Privatisation will Weaken the Banking Sector & Reward Crony Capitalism
  4. Bank Privatisation will Bring Back Bank Failures:
    India did not have a single public sector bank during independence. Rather, there were over one
    thousand private and cooperative banks. Between 1947 and 1955, there were more than 500 cases of
    bank failures, with many depositors losing their life savings along with their faith in the banking system.
    That was a major reason why banks were nationalised in India. All the banks which have failed in the recent times, namely the Yes Bank (2020) and Lakshmi Vilas Bank (2020), or the Global Trust Bank (2004) were private sector banks. Private sector NBFCs like the IL&FS and DHFL have also collapsed in recent times. In contrast, not a single PSB has failed till date.
  5. Bank Privatisation will Shrink Employment Opportunities, Especially for SC/ST/OBCs:
    PSB mergers have already set in motion the process of employee retrenchment and bank branch closures. Total employee strength of the PSBs has fallen from 8.44 lakh in March 2018 to around 7.7 lakh in March 2021. The total number of PSB branches declined by 3321 between March 2017 and September 2021. PSB privatisation will accelerate these trends, which will shrink employment opportunities for the youth, particularly for the SC/ST/OBC sections, because unlike the public sector,the private sector does not follow reservation policies for the weaker sections.
    The fact that the government is choosing the softer option of selling national assets rather than
    mobilising taxes from the rich and affluent sections of society, particularly the billionaires who have
    grown immensely wealthier through the stock market bubble, expose its class bias.
    Appeal to the People: We appeal to the people of India to rise up against the government’s retrograde
    policy of selling out our public sector enterprises, which form the backbone of our national economy.
    We appeal to the millions of small depositors of the PSBs, the farmers, MSMEs, Self-Help Groups and
    loanees from the weaker sections of society, to rise up against bank privatisation, which will harm their
    interests. We appeal to all civil society organisations, farmers’ and workers’ unions, political parties and other stakeholders of our democracy to join and support our movement in defense of the PSBs, and public sector enterprises in general. Together, we shall defeat the policies of privatisation.
    Throughout the country the bankers are agitated through various means like Bus Yatra, Tweeter
    campaign, street meeting, and social media campaign. People from different strata of the society like teachers, artists, businessmen, politicians are also participating in their meeting. On 18th the tweeter campaign was a massive success under the banner of UFBU. Their hashtag #PublicBanksNotForSale was trending for more than 2 hours and attracted the attention of media .

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