Two-day Bank Strike Ends; Unions Warn of Intensifying Stir if Govt Goes Ahead With Privatisation of PSBs

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The two-day nationwide strike by the public sector bank (PSB) unions ended on Tuesday, with disruption in services like cash withdrawals, deposits, cheque clearances, remittances and loan approvals hitting customers. Business transactions as well as government treasury operations were also impacted. The United Forum of Bank Unions (UFBU), consisting of nine bank unions — AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO — had given the strike call to protest against the government’s decision to privatise two more public sector lenders.

“Strike was a full success, employees and officers stood with us. The way they participated and raised slogans, it shows their disapproval of the government decision very clearly. “We got support from all trade unions, some farmer organisations, lot of political parties have supported us,” AIBEA General Secretary C H Venkatachalam told PTI. In a statement, the Centre of Indian Trade Unions (CITU) congratulated the participating employees and officers across the country for protesting “against the BJP government’s moves to privatise public sector banks”. “Around 10 lakh bank employees and officers participated in the strike called by the United Forum of Bank Unions (UFBU), paralysing the entire banking sector.

“The joint platform of central trade unions and almost all independent industrial federations in the country extended full support to the strike. Tens of thousands of workers participated in the demonstrations across the country, in support of the strike,” CITU said. Venkatachalam said the bank unions will again engage with the government on the issue and try to convince it that the proposed move is not in favour of the economy or the general public.

He said if the Centre feels that there are problems in the running of the public sector lenders, the bank unions will try to address those concerns. Before going for the strike, conciliation meetings were held with the Additional Chief Labour Commissioner on 4th, 9th and 10th March. The UFBU offered to reconsider the strike provided the government reconsidered its decision, he said.

“Again we will tell them, whatever are the grievances against the running of the public sector banks, we are ready to talk and we will address the concern and then there is no need for privatisation. “But still if you are not convinced…then more strikes will happen. If they are not ready to listen to us and go ahead with their decision on the back of their strength in the Parliament, then there will be more strikes in the future,” Venkatachalam warned. Bank unions claimed as many as 10 lakh staffers took part in the two-day pan-India strike. Normal banking services were greatly affected because of the strike, the All India Bank Employees Association (AIBEA) said.

Finance Minister Nirmala Sitharaman in her Union Budget speech for 2021-22 said the government will privatise two more public sector banks going forward. The government has already privatised IDBI Bank by selling its majority stake to LIC in 2019, and has merged 14 public sector banks in the last four years.

Bank unions said the PSBs are earning operating profits and there is no need for privatisation. As on March 2020, these banks earned a total profit of Rs 1,74,000 crore. However, since the banks provided Rs 2,00,000 crore for bad loans, there was a net loss of Rs 26,000 crore, they said.

“Hence if bad loans are recovered from the private corporate companies, banks will be earning much more. Private sector is responsible for the huge bad loans. In fact they should be punished for this crime. But the government is rewarding them by handing over the banks to the private sector,” AIBEA said. Seeking co-operation and support of the people in their ‘struggle to save the PSBs’, the bank unions said if the government proceeds with its decision to privatise the lenders, they will be left with no option than to further intensify their agitation with more prolonged strikes.

CITU urged the bank employees to intensify the struggle to save public sector banks from being sold off to corporates, both Indian and foreign. “CITU and the joint trade union platform have already extended their support to the country wide strike of the general insurance employees on 17th March and that of the LIC of India employees on 18th March, against privatisation. “CITU members will actively participate in solidarity actions on these days,” it added.

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Nationwide Strike Impacts Banking Services of PSU Banks on Day One

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Banking services such as cash withdrawals, deposits, cheque clearing and business transactions were impacted across the country on Monday, the day one of the PSU bank union’s strike, against the proposed privatisation of two more state-owned lenders. United Forum of Bank Unions (UFBU), an umbrella body of nine unions, had given a strike call for March 15 and 16, and claimed that about 10 lakh bank employees and officers of the banks will participate in the strike.

In the Union Budget presented last month, Finance Minister Nirmala Sitharaman had announced the privatisation of two public sector banks (PSBs) as part of the government’s disinvestment plan. All India Bank Officers Association (AIBOC) General Secretary Sowmya Dutta said the government policies are going to have ill effects on the economy as also it will be reflected in the upcoming polls in some states.

He said nearly all the bank employees have taken part in the two-day strike except for top-level employees. “All banking services are impacted from cash withdrawals to deposits, business transactions, loan process, cheque clearing, account opening and business transactions,” he said.

He said the striking employees have taken out rallies, wherever permitted, across the country, and given a sat-in and if the government does not listen to them they will go for an even bigger, indefinite strike like the one on the lines of ongoing farmers’ agitation. “We are connected with crores of population through our branches, we are educating our customers about the government’s ill policies and how it is going to impact them,” Dutta said.

Through the Department of Financial Services, the bank unions have also conveyed to the Finance Minister to withdraw her statement from the floor of Parliament about privatisation of the state-owned banks, he added. All bank employees from the scale I, II and III had a 100 per cent participation across the banking sector in Monday’s strike, said a bank official who is not authorised to speak to the media.

“We call them assistant managers, managers and senior managers. At this level, there is 100 per cent participation in the strike and 80-90 per cent branches are headed by them,” the official said. The bigger branches headed by chief managers or AGMs are about 20 per cent, so even if these senior level employees are not taking part in the strike, they alone cannot run the bank, said the official cited above.

Meanwhile, branches of private sector lenders like ICICI Bank, HDFC Bank and Axis Bank are open as they are not part of the strike. The government has already privatised IDBI Bank by selling its majority stake in the lender to LIC in 2019, and has merged 14 public sector banks in the last four years.

According to All India Bank Employees Association (AIBEA) general secretary CH Venkatachalam, services at branch level; cheque clearance; and government transactions have been affected. Members of UFBU include All India Bank Employees Association (AIBEA), All India Bank Officers’ Confederation (AIBOC), National Confederation of Bank Employees (NCBE), All India Bank Officers’ Association (AIBOA) and Bank Employees Confederation of India (BEFI).

Others are the Indian National Bank Employees Federation (INBEF), Indian National Bank Officers Congress (INBOC), National Organisation of Bank Workers (NOBW) and National Organisation of Bank Officers (NOBO).

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Parliament proceedings | Banks wrote off ₹1.15 lakh cr. in nine months of FY21: Anurag Thakur

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“As per RBI data, scheduled commercial banks (SCBs) have written off loans of ₹2,36,265 crore, ₹2,34,170 crore and ₹1,15,038 crore during FY2018-19, FY2019-20 and the first three-quarters of FY2020-21 respectively,” the Minister said.

Banks have written off bad loans to the tune of ₹1.15 lakh crore in the first three-quarters of the current fiscal, the Lok Sabha was informed on March 8.

As per RBI guidelines and policy approved by bank boards, non-performing loans, including those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off, Minister of State for Finance Anurag Singh Thakur said in a written reply to the Lok Sabha.

Banks evaluate the impact of write-offs as part of their regular exercise to clean up their balance-sheet, avail tax benefit and optimise capital in accordance with RBI guidelines and policy approved by their boards, he said.

However, Mr. Thakur said, as borrowers of written-off loans continue to be liable for repayment and the process of recovery of dues from the borrower in written-off loan accounts continues, writing off does not benefit the borrower.

“As per RBI data, scheduled commercial banks (SCBs) have written off loans of ₹2,36,265 crore, ₹2,34,170 crore and ₹1,15,038 crore during FY2018-19, FY2019-20 and the first three-quarters of FY2020-21 respectively,” he said.

Regarding recovery of written off bank loans, he said, “as per RBI guidelines, banks are required to have a loan recovery policy, duly vetted by their boards, that set down the manner of recovery of dues, period-wise targeted level of reduction in non-performing assets, etc.”

“A number of recovery mechanisms are available to banks to effect recovery, such as filing of a suit in civil courts or in Debts Recovery Tribunals, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, filing of cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, through negotiated settlement/ compromise, and through the sale of non-performing assets,” he said.

In the last two financial years and the first three-quarters of the current financial year, as per RBI data, SCBs recovered an amount of ₹3,68,636 crore, including the recovery of ₹68,219 crore from written off loan accounts, he said.

He said non-performing assets (NPAs) of banks have declined by ₹2,79,627 crore to ₹7,56,560 crore as of December 31, 2020, as a result of the government’s strategy of recognition, resolution, recapitalisation and reforms.

Steps to check unauthorised digital lending apps

Replying to another question, Mr. Thakur said various measures have been taken to check unauthorised digital lending platforms.

He said the Ministry of Electronics and Information Technology had blocked 27 loan-lending apps under Section 69A of the Information Technology Act, 2000, to prevent fraudulent activities.

Members of the general public were cautioned against unauthorised digital lending platforms/apps with an appeal to verify the antecedents of the service provider with translation in vernacular languages also being released in the local media across States, he said.

Mr. Thakur said there was no proposal, at present, for limiting banking operations to five days.

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