Why is the government privatizing banks:It is not unusual for the Bank Employees’ Union to engage in continuous strikes to condemn the actions and policies of the Central Government. But we cannot pass this strike by treating it as a regular struggle.
The bank employees‘ strike lasted for two days condemning the federal government’s move to privatize public sector banks. According to bank sources, check transactions worth Rs 37,200 crore were disrupted in a single day across the country due to the strike.
Banking services across the country were severely affected by the strike. In those two days no work was done including deposit, withdrawal, check transfer.
Why this strike?
It is not unusual for the Bank Employees‘ Union to engage in such frequent strikes to condemn the actions of the Central Government. But we cannot shy away from thinking of this strike as a routine struggle.
This is because the Banks Amendment Bill for the privatization of public sector banks is expected to be introduced in the Parliament soon. In this connection, the Bank Employees Union went on a nationwide strike on 16 and 17 December in protest against the privatization of banks.
Why is the government privatizing public sector banks
The bank employees’ union alleges that the government plans to reduce the number of 12 public sector banks across the country to five, and as a precaution, sell government shares in some banks to the private sector.
All kinds of questions were being raised that why the government is privatizing banks, what are the problems in privatization of public sector banks, will privatization increase the profits of the above banks, is there any evidence that banks are saving people’s private sector? banks and whether private banks were performing better than state-controlled banks.
“Since 1992, Indian bank employees‘ unions have fought 36 struggles against the policies implemented by banks, against merger and privatization of banks, because of the many problems with privatization of banks. In fact, when private banks go bankrupt , Public Sector Banks are the mainstay Recently when Yes Bank went bankrupt, even SBI Bank saved it.
Thus, out of 36 private banks that went bankrupt after 1969, 33 were with public sector banks. In such a situation, it is not fair to say that the Government of India is privatizing public sector banks, its operation will be better and the services will be better.
The bank employees‘ union alleges that the government plans to reduce 12 public sector banks across the country to five and, as a first step, plans to sell the existing government stake in some banks to the private sector.
Axis, HDFC Bank and ICICI Bank, which are currently said to be the best performing private banks, are all privatized banks. ICICI Bank CEO Chanda Kochhar has been charged with fraudulently lending Rs 3,250 crore to Videocon in connection with the ICICI Bank Videocon loan fraud case.
What is the reaction of the central government, which says that banking operations will be better if public sector banks are privatized? Also, the money of the customers who had deposited money in the bank has become unsecured due to the insolvency of the bank due to PMC Bank fraud. Unlike the insecurities that exist in depositing money in private banks, there is none in public sector banks.
Government setting an example for America!
He set an example for the United States in the privatization of banks. But the banks there have taken out proper insurance of their customers’ money. Banks continue to pay half the premium and half to the customers. Therefore, despite the bank going bankrupt there, the money of the customers is safe.
As of 2008-2020, 512 private banks in the United States went bankrupt. But, all the money of the customers is saved through insurance plans. Is this the situation in India? There is bankruptcy but the maximum amount of insurance available to the customers is Rs 5 lakh. All these need to be formalized by the government first.
Public sector banks provide most of the loans to people such as business loans, loans to self-employed groups, education loans and agricultural loans. As of March 2020, the total borrowing by PSUs stood at Rs 63.71 lakh crore. During the same period, total lending by private banks stood at Rs 37.07 lakh crore. Similarly, people keep more of their money in public sector banks.
Why is the government privatizing banks:It is not unusual for the Bank Employees’ Union to engage in continuous strikes to condemn the actions and policies of the Central Government. But we cannot pass this strike by treating it as a regular struggle.https://t.co/2UsuGhPRca pic.twitter.com/ekJTGhKMzn— Asia Global Bank (@AsiaGlobalBank) December 19, 2021
As of March 2020, the total value of people’s holdings in public sector banks stood at Rs 93.43 lakh crore. During the same period, the total value of people’s holdings in private banks was Rs 40.40 lakh crore. Considering the above characteristics, public sector banks are performing better than private banks in providing better service to the people.
42 crore public accounts!
Public sector banks are performing better than private banks in terms of social welfare. This is because out of about 42 crore public accounts opened in zero balance to help the common people, 98 percent of the accounts are in public sector banks. Only 2% of accounts are opened in a private bank. Private banks think too much only about their own development. So they are not interested in opening zero balance bank accounts.”
At a time when bank accounts are a must for all and banking services are easily available to the public, the government’s undertaking of an unsecured bank privatization scheme for both will come as a blow to the common people. Therefore, privatization is not the solution to the existing problems, but the strengthening of public sector banks.