The Punjab National Bank Officers Association (Kerala) has opposed the Union Government move to merge and consolidate banks in the country.
In a resolution adopted at the State conference at Thrissur, the Association also protested the move to avail a loan from the World Bank to capitalise the public sector banks, and also the move to allow full voting rights in banks to the shareholders.
Uncertain future
In a country where 50 per cent of the population does not have even a bank account, the need of the hour is to expand the public sector bank network for total financial inclusion, the resolution observed.
As against the need for more branches, bank mergers will result in closure of thousands of bank branches. Closure of banks will also leave many employees, at all levels, without jobs.
Impact on development
Moreover, the resolution pointed out, if banks are consolidated and transformed into huge financial institutions to cater to corporate needs, social lending will become the casualty.
The attempts of State Bank of India (SBI) management to acquire associate banks under Section 35 of the SBI Act will ultimately put an end to the lead role played by them in development of respective states, it said.
At a cost
The Association also pointed out that World Bank assistance would be invariably accompanied by adverse conditionalities. Past experiences have showed that the World Bank has demanded liberalisation of banking financial sector when some countries approached them for loans, it said in a statement.
Under Section 12(2) of the Banking Regulation Act, there exists a ceiling of 10 per cent on voting rights of the investors. It is learnt that there is a proposal to delete this clause which will enable full proportionate voting rights to the investors in the capital of banks, the conference observed.
Earlier, the conference was inaugurated by Mr S. Iyengar, National President, All-India PNB Officers Federation.
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