PRESS RELEASE
By C.H. VENKATACHALAM, GEN SECRETARY, ALL INDIA BANK EMPLOYEES ASSOCIATION
Govt. Press Release says Govt. business will be given to private Banks. It is like feeding milk to the poisonous snake
24-2-2021
Govt. decision to lift embargo on private sector banks to have access to Government’s business as announced by the press release of the Finance Ministry is unfair and needs to be withdrawn. The press release says that private banks will thus be treated equally. Press release says that private banks will be equal partners. This is a strange contention of the Government. If all Banks are equal, then why the private Banks are exempted from emphasis on rural branch expansion, rural lending, agriculture loans, priority sector loans, etc.
Government Banks have mobilized 42 crores of Jan Dhan Yojana bank accounts of the poor people. Private Banks have opened only 1.25 crores of such accounts of the poor people. Why they were not equal partners in this pet scheme of the Government. In giving agriculture loans, let private banks compete with public sector banks. In giving education loans to the poor students, will private banks compete. In opening rural branches, let them compete with nationalized Banks.
Public sector Banks’s social banking obligations have the cost. Lesser rate of interest on agriculture loans or education loans or MSME, etc. ha a cost to the Banks. Government’s business to these Banks helps in cross-subsidisation of the cost. If Govt. will distribute their Govt. Business to private banks, the ability of public sector banks to lend to weaker and priority sectors on concessional rates of interest will become difficult because Govt.’sbusiness helps thee Banks to balance the cost.
This Govt. decision to give equal treatment to private Banks is unfair and to the disadvantage of public sector banks.
Private sector is the main contributor of Banks’ huge bad loans. But there are attempts to hand over our nationalized banks to these private sector.
Now this decision is meant to boost the private banks at the cost of public sector banks. We deplore this decision and demand of the Government to review the decision.
C.H. VENKATACHALAM GENERAL SECRETARY
