TRADE UNIONS PLEA TO MPs TO STOP BANKS' CONSOLIDATION PROCESS

The following news item has appeared in The Hindu Business Line:

With the Finance Ministry raising the temperature a few notches on the consolidation front by initiating dialogue with public sector bank chiefs, two trade unions have decided to take it upon themselves to persuade MPs to oppose consolidation among state-owned banks and reforms in the banking sector.
The two unions – the All Indian Bank Employees Association and the All India Bank Officers' Association – fear that consolidation is the World Bank's price for extending the $2-billion Banking Sector Support Loan for public sector banks.
Once consolidation among public sector banks is over, the unions fear that the floodgates for privatisation will be thrown open.
They feel that through the consolidation route the Government is preparing the ground for acquisition of Indian banks by foreign banks.
According to Mr Vishwas Utagi, Secretary, AIBEA, “We will make a fervent appeal to our MPs to stall the process of consolidation and banking reforms in public interest. If the Government persists with its consolidation efforts then the very purpose (to further the social and developmental goals of banking) for which bank nationalisation was effected in 1955, 1969 and 1980 will be defeated.”
Consolidation, says Mr Utagi, will turn banks into monopoly institutions.

Instead of catering to the financial needs of the ‘aam aadmi' , these institutions will end up catering to the interests of corporates, the rich and the elite.
Further, the unions are anxious that consolidation among banks will spark a wave of branch closures due to overlapping of branches, thereby rendering thousands of employees redundant.
Source: http://www.thehindubusinessline.com/2009/12/04/stories/2009120453210600.htm