NEW DELHI: Criticising the Centre’s determination to merge sure public sector banks, the Left events on Saturday stated the “unwarranted” transfer will result in shrinkage of the community of branches and adversely affect monetary inclusion.
They alleged the choice is a deliberate try to divert consideration from the true points going through the nation’s financial system which is “in shambles”.
Union Finance Minister Nirmala Sitharaman on Friday introduced the merger of 10 public sector banks into 4 entities with a view to create fewer and stronger global-sized lenders with sturdy steadiness sheets that can be utilized to spice up credit score and spur development.
The announcement got here shortly earlier than authorities knowledge confirmed that development in Asia’s third largest financial system slumped to an over six-year low of 5 per cent within the April-June quarter of 2019-20.
“This determination is completely unwarranted and introduced at an inappropriate time. When the nation’s financial system is in shambles, banks have an important function to play in boosting the financial system. That is the highest precedence right now,” the Communist Celebration of India (CPI) stated in an announcement.
“However sadly, the entire consideration is now being diverted from revival of the financial system to merger of banks. It is a deliberate try to shift (consideration) from actual points going through the financial system,” it stated.
Alleging that corporates are dishonest the banks, the CPI stated the lenders face a serious problem of recovering the massive dangerous loans.
“The proposed transfer to merge banks will shift the eye of the banks to points linked with merger and dangerous mortgage restoration will take a again seat,” it stated.
The social gathering stated merging banks will imply closure of branches and taking banking companies away from the widespread folks.
“Within the earlier merger of banks with SBI, we’ve got seen that 7,000 branches have been closed down. Similar will occur now additionally,” it stated.
Contending that India didn’t want huge banks, the CPI stated globally huge banks have been discovered to be very dangerous.
“We’d like our public sector banks to successfully serve the folks and we don’t want such huge banks which is able to solely assist the massive corporates,” it stated.
“Therefore merger of banks is unwarranted and isn’t in our nation’s curiosity. Authorities ought to rethink its determination. The CPI extends its assist to the agitation of the financial institution workers and their unions,” it added.
The Communist Celebration of India (Marxist) echoed related sentiments.
“The merger will result in the shrinkage of the community of branches, denying accessibility, notably in rural India,” it stated.
“It’s reported that the merger of Dena Financial institution and Vijaya Financial institution with Financial institution of Baroda will end result within the closure of 800 branches,” it added.
Opposite to the idea of common monetary inclusion, it will result in additional exclusion of crores of Indians, the CPI(M) stated.
“India is already one of the vital unbanked nations on the planet. This transfer will additional push the small financial savings in rural India into the clutches of sleazy chit fund operators and monetary mercenaries,” it stated.
Weakening of public sector banking is supposed to facilitate the privatisation of the nationalised banking sector, it claimed.