The All-India Bank Employees Association (AIBEA) and Bank Employees Federation of India (BEFI), representing a large majority of the employees of Public Sector Banks (PSBs), have called for an all-India bank strike on October 22. The strike is being called to oppose the announced merger of ten public sector banks as well as to demand an increase in wages. The agitating bank employees are demanding that the government should take strict action against the defaulting corporate houses and take steps to secure full repayment of the bad loans. They are demanding an end to the punishing service charges imposed on customers and an increase in interest rates on bank savings. They are demanding security of jobs and recruitment in all vacant positions.
Mazdoor Ekta Lehar spoke to comrade B.S.Sharma, Vice-President of the AIBEA and General Secretary of the Delhi State Bank Employees Federation. Elaborating on the reforms that the government is trying to push through in the banking sector, he explained that their struggle is in defence of the interests of not only the bank workers but the whole of society. We reproduce below excerpts of the interview:
MEL: Recently we have witnessed the merger of several PSBs. How is this going to affect banking services and the bank workers?
BSS: The government is justifying the merger of banks with the objective of making them "global-sized banks". The Finance Minister has claimed that the merger will also help in consolidating strong national presence and global reach of these banks. It is being claimed that bigger banks will have more capital and will be able to give loans more easily. However, in the present conditions of economic crisis, demand for loans has gone down drastically. So we do not see the need to rush into mergers on such a large scale at this time.
Merger of banks affects their performance in many ways. Confidence of customers decreases and this leads to reduction in customer flow. The rationalization of staff that takes place after each merger leads to many employees being transferred to branches in different parts of the country and many others face the prospect of losing their jobs. Many senior employees are being pressurized to take VRS. For example, due the closure of a large number of state branches of SBI in recent months, nearly 5-6 lakh employees have been forced to take VRS.
When banks are merged, many branches, especially in rural and remote regions of the country, are closed down. A large section of our rural population is deprived of banking services even today and is at the mercy of unscrupulous money lenders. The merger will further deprive these people from banking services, even as the government claims that it is encouraging people to open bank accounts.
The government justifies the merger, saying that “big banks will not fail”. But at the time of the 2008 global crisis, we saw some of the biggest private sector banks fail. Moreover, the merger of banks has not led to any decrease in banking scams, which are actually a loot of money of working people. Meanwhile, the RBI has continued to give licenses to private sector banks.
MEL: In what ways has the current crisis in the banking sector affected the people?
BSS: The government has been using the crisis in the banking sector to justify reducing the interest rates on people’s savings in PSBs. Currently, SBI is offering an interest rate of 3.25% on savings of up to Rs. 1 Lakh, which is lower than the inflation rate of 3.5%. This is a big attack on working people, especially on senior citizens and retired people, who depend on the bank interest on their savings, for their livelihood. At the same time, heavy service charges have been imposed on practically all banking services that were earlier rendered free of cost.
The real reason for reducing the interest rates is to enable the Public Sector Banks to give huge loans to the big corporate houses at low interest. This practice is continuing, despite the fact that so many big corporate houses have defaulted on paying back their loans.
MEL: The massive NPAs due to defaulting corporate houses have greatly affected the credibility of Public Sector Banks. The demand of bank employees that the government reveal the names of the corporate defaulters has so far remained unheard. How are you taking up the struggle on this issue?
BSS: We have demanded that the government introduce more stringent laws to punish the defaulting corporate houses and recover the bad loans. So far, the amount of NPAs is increasing, while the recovery of bad loans has been near minimal.
The Insolvency and Bankruptcy Law introduced by the government is nothing but a means to provide an exit route to the defaulting corporate houses and shift the burden on to the people. This is causing heavy losses to the Public Sector Banks, which are being forced to reduce their interest rates and levy heavy service charges.
The government has been forced to withdraw the proposed Financial Resolution and Deposit Insurance (FRDI) Bill, which contained a 'bail-in' clause for resolution of bank failure, due to massive public opposition. We have vehemently opposed this bill. The recent PMC bank scam once more exposes the role of politicians and corporate houses in looting the working people.
MEL: What are the moves being taken by the government towards privatization of the banking sector? How will this affect the bank employees and the people?
BSS: The share of private banks in the banking sector is steadily increasing, while the share of the Public Sector Banks is going down. The government and the corporate media do a lot of propaganda to suggest that PSBs are loss-making, inefficient, corrupt, etc. to justify opening up the banking sector to more private players. But worldwide, private sector banks have been known to be involved in some of the biggest corruption scams.
PSBs extensively provide banking services in rural and remote areas, whereas the private banks operate mainly in the big cities, where their services yield much higher profits. PSBs are continuously under pressure to provide huge loans at low rates, for projects of the public sector enterprises as well as corporate houses. These are some of the factors responsible for the crisis in the PSBs.
MEL: The government has recently announced that PSB employees will be paid a part of their wage arrears, even as wage revision talks of the bank workers unions with the government remain inconclusive. How do you view this move?
BSS: PSB employees are waiting for wage revision since November 2017. Despite 30 rounds of talks since 2017, between the United Forum for Bank Unions (UFBU) and the Indian Banks' Association (IBA) representing the bank managements, wage agreement is not yet in sight. The last time the hike was 15 per cent. So far, the IBA has offered 12 per cent. We are pushing for a higher raise. The IBA has also suggested a review of the proposed performance-linked pay (PLP) scheme for about 8.5 lakh public sector bank employees, raising concerns over further delay in the wage negotiations.
Normally, the wage arrears are paid after signing of the wage agreement between the unions and the management. We consider this move of the government an attack on the right to collective bargaining. By this announcement, the government is trying to undermine our struggle.
MEL: What is your overall assessment of the reforms that the government is proposing for the banking sector?
BSS: The government is pushing for greater privatization in the banking sector. The direction of the banking sector reforms of the government is towards handing over the Public Sector Banks and all their assets to private companies. This is being done in the interests of big Indian and international corporate houses and financial institutions. This will adversely affect the banking services to the masses of poor and working people, to the peasants and rural population. This will also negatively impact the working conditions of bank employees, further push down their wages and render large numbers of workers unemployed.
We are of the view that the present reforms being proposed in the banking sector are completely against the interests of the whole of society. We are vigorously opposing these reforms.
MEL: Thank you very much for explaining the cause of the present crisis in the PSBs and highlighting the struggle of the bank workers against the present reforms in the banking sector.
This is a very important part of the struggle of the workers of all sectors across the country, against the all-sided anti-social offensive of the government, driven by the interests of the biggest Indian and foreign corporate houses. We are with you in the struggle and wish you all success.