UFBU, the umbrella organization of 9 Bank Unions – AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO, is supported by even Joint Forum of Central Trade Unions which includes – INTUC, AITUC, HMS, CITU, AIUTUC, TUCC, SEWA, AICCTU, LPF, and UTUC. Not only that, all other organizations of the central and state sector that are against the privatisation spree of the Modi government, are also supporting the movement, such as in railways, electricity, transport, insurance etc. The unions, such as of students and farmers, are also supporting them since they believe the privatisation of public sector undertakings would ultimately harm them. It is therefore uncertain, as of now, how the turn of events would ultimately come out.

Though, only a few days ago on August 23, the Union Minister of State for Finance Bhagwat Karad has said to mediapersons in Shimla, that the public sector banks would not be privatizes, the UFBU is not taking it on its face value, since the Union Minister of Finance Nirmala Sitharaman had long back informed the country for the first time in the Union Budget 2020, that Union Government planned to privatise two PSBs and several other PSEs. One year after New Public Sector Enterprise Policy for ‘Aatmanirbhar Bharat’ was notified on February 4, 2021, which is applicable to Central Public Sector Enterprises, Public Sector Banks, and Public Sector Insurance Companies. It was only last month on July 18, FM Sitharaman had said in a statement in the Parliament of India that her government was committed to privatisation of state-run banks.
Bank Unions suspect the privatisation of public sector banks harmful to common people of the country in general and the bank employees in particular. Moreover, the fear is likely to come true with the large scale privatisation move of Modi government. Even an RBI article published in its latest August bulletin has said that big bang privatisation of public sector banks can do more harm than good. The authors of the article have even warned, asking the Union Government to take a nuanced approach on the issue. While private sector banks are more efficient in profit maximization, their public sector counterparts have done better in promoting financial inclusion, the article read.

The PSBs in India had fallen into an unprecedented crisis by 2017. It was worst since the beginning of the process of economic reform in the country in 1991, as it was mentioned even in the Economic Survey of 2017-18. There were 27 public sector banks at that time, and all of them were suffering from large amount of Non Performing Assets (NPAs), and the very survival of the banking system was found to be at stake. Moreover, they were being eaten up by large number of frauds and corruption. The Union Government had then planned their merger and privatisation purportedly to save them from collapse. In a first three-way merger, Dena Bank and Vijaya Bank were merged with Bank of Baroda in 2019. Prior to this, the Union Government had merged five associate banks of SBI and Bharatiya Mahil Bank with the State Bank of India. In 2020, the Union Government merged 10 nationalised banks into four large ones bringing down the number of the public sector banks to only 12.

Though the public sector banks have recovered Rs5.17 lakh crore in NPAs and have written off Rs1.24 lakh crore of bad loans since 2015, to have a cleaner balance sheet of the PSBs, they are far from the deeper crisis plaguing the financial system. It caused a fall in gross NPA ratio of PSBs has from 14.6 per cent on March 31, 2018 to 7.4 per cent on March 31, 2022, while the net ratio declined from 8 per cent to 2 per cent. Even then, stressed assets could decline to 8.7 per cent from 15.3 per cent. PSBs have also filed suits against 98.5 per cent of willful defaulters, FIRs have been lodged against 40.2 per cent and SARFAESI action initiated against 75.5 per cent . The Union Government has also infused Rs3.36 lakh crore of capital while PSBs themselves have raised an additional Rs2.99 lakh crore from the market. The government has further provided a conducive business environment and ‘healthy’ competition which has encouraged private sector banks to flourish in the country, an official have been quoted saying further that the share of PSBs in gross advances have fallen from 74.29 per cent in 2014-15 to 58.34 per cent in 2021-22. It clearly indicates that the PSBs are being mishandled and being made ready to hand some of them over with cleaner balance sheets to the private sector.

A recent IMF paper has warned that the rise of the corporate power has become a threat to economic recovery. The UFBU leaders allege that Modi government has been contribution to the rise of corporate power, and if the public sector banks are handed over to them, the common people would suffer even more financial injustice and the economic development would become lopsided and would be on the mercy of the Private Bankers subject to only profiteering.

UFBU leaders have therefore not only threatened for longer strike action in public sector banks but also preparing for that in right ernest. They have already observed several successful long duration strike actions for one or two days in the last three years against Modi government’s privatisation move. If Modi government goes ahead with its privatisation spree, longer strike action would become reality endangering the entire financial economic system of the country.