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NEW DELHI: India’s banking system was disrupted for the second day in a row on Friday as more than 900,000 people working in the country’s public banking sector continued their strike to protest the government’s decision to privatize state-owned banks.
The Indian government is reportedly seeking to gradually privatize its 12 state-owned banks, which control over 80% of the country’s financial transactions. Finance Minister Nirmala Sitharaman announced in March that two of them would be selected for sale in the current fiscal year.
To facilitate the privatization process, the government has entered the Banking Law (Amendment) Bill 2021 for presentation and adoption during the current winter session of Parliament. The United Forum of Banking Unions, an umbrella body for nine banking unions, believes that bank privatization will significantly weaken the Indian economy. He organized the two-day strike after negotiations with the government broke down.
âWe had talks with the government, but the government refused to give us assurances; that’s why we had to go on strike, âJatinder Pal Singh, president of the State Bank of India Officers Association in Delhi, told Arab News.
âPublic sector banks have been the backbone of the country’s economy, as well as its financial structure,â he said. “All of the government’s social and economic programs have been successfully implemented by public sector banks and they have a profound reach across the country.”
Public sector banks are seen as vital for the implementation of government initiatives such as rural credit expansion, he noted.
âIf these banks are privatized, our poor and our citizens will be deprived of banking services,â Singh said. âPrivate sector banks don’t care about social responsibility. “
Sanjeev Kumar Bandlish, general secretary of the All India State Bank of India Staff Federation, said there was no guarantee that private sector banks would not collapse and that by privatizing the banks of the The for-profit public sector, the government “was putting people’s money at risk.”
When Yes Bank, a major private sector bank, collapsed in March last year, it was rescued by the State Bank of India, which acquired a 49% stake in the lender.
âIn 2008, when the global economic collapse took place, the Indian economy (survived) thanks to public sector banks,â Bandlish told Arab News. âThe then Prime Minister, Dr Manmohan Singh, and the Minister of Finance P. Chidambaram said so in parliament. “
The government was due to present the amended banking bill to parliament on Friday, but it failed to do so, with local media suggesting that further discussions on the privatization issue were underway with the country’s central bank, the Reserve Bank. of India (RBI).
Finance ministry officials were unavailable for comment despite repeated attempts to reach them on Friday.
New Delhi is keen to reorganize the banking sector to bolster government revenue as the financial effects of the COVID-19 pandemic continue to be felt. But it is a politically risky decision, as it could endanger hundreds of thousands of jobs.
“Privatization will lead to higher unemployment at a time when the economy is already struggling and there is declining household income,” Professor Arun Kumar of Jawaharlal Nehru University in New Delhi told Arab News. .
âThe pandemic has shown how public sector banks support marginalized people and the rural population,â he said. âThe need is to strengthen the public sector rather than weaken it.