Mumbai: On Friday in a Press conference the Indian Finance Minister announced the merger of 10 Public Sector banks into 4 distinct banks in order to create fewer but stronger banks, The Bank Unions, however, said that the Merger is completely irrational and lacks logic.
The merger of Vijaya Bank, Dena Bank and Bank of Baroda brought down the number of banks to 12 from 19. In the year 2017, there were in total 27 banks after the State bank was merged with its five associates and Bhartiya Mahila Bank.
The union had said that the government is coming up with merger plans when the economy is already ailing. They further said that the government has not even merged a weak bank with a stronger one. The All India Bank Employees said, “The proposals which the government has moved are unmindful since it has no logic or rationale. Neither, it is the case that a weak bank is merged with stronger ones nor geographically compatible banks are being merged.”
For instance, the United Bank headquartered in Kolkata is to be merged with Delhi based Punjab National Bank while the Syndicate Bank will be merged with Canara Bank who has a network in the same geographical region.
The government reported that the government economy had slowed down to the lowest level in 25 quarters in April-June period. The GDP in the April-June quarter expanded to 5% the lowest in the six and a half years. The RBI, however, predicts the GDP expansion up to 6.9% by FY20. And an expansion of 7.3-7.5 for the second half (October to March).
“At this point when more stability is needed the government itself is attempting to destabilize the finance and economy,”
“On one side the government wants to implement Jan Dhan but how it is possible the same by closing down branches,” said the official on the Banks closing their branches. The bank unions announced that they will observe black day on Saturday in opposition to the government’s decision of merger.
The Banks that will be merged are Allahabad Bank, Andhra Bank, Canara Bank, Corporation Bank, Indian Bank, OBC, Punjab National Bank, Syndicate Bank, Union Bank of India, United Bank of India.
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