People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 51

December 23, 2012



Bank Employees Strike Successful


C P Krishnan


BANK Employees are on war path once again; this time three organisations namely Bank Employees Federation of India (BEFI), All India Bank Employees’ Association (AIBEA) and All India Bank Officers’ Association (AIBOA) have given call for a day’s strike on  December 20, 2012 protesting against the anti-people’s banking policy of the central government.  The UPA-2 government emboldened by the manoeuvred victory on the floor of the parliament on FDI in retail trade has pushed through the retrograde Banking Bills in this winter session itself. 


Through the enactment of these bills the government intends to enhance the ceiling of the voting rights of the private shareholders in the public sector banks from 1 per cent to 10 per cent, to enhance the ceiling of the voting rights of the shareholders in the private sector banks from 10 per cent to 26 per cent, enable free merger of the public sector banks, and convert non-performing assets into equities of the very same delinquent companies.


The UPA-1 government seriously attempted to push through a similar bill in the year 2005.  Due to the resolute opposition of the Left parties, without which the then government could not survive, that bill had to be shelved.  Now this government with the friends from within and outside UPA-2 has enacted the Banking Laws which would affect the interest of the common man.


The provisions of the present bills are clearly aimed to weaken the government control over the public sector banks. Five corporates forming a cartel among them can have the virtual control of the nationalised banks while the name board remaining “A Government of India Undertaking”.  The indigenous private sector banks whose total capital amounts to nearly four thousand crores of rupees hold more than nine lakh crores of rupees of public deposits. In most of these banks there is already a majority or substantial foreign investment.  The move to enhance the ceiling on voting rights up to 26 per cent in private sector banks in the background of FDI being allowed up to 74 per cent will virtually allow these banks to be taken over by the Giant Foreign Banks whose track record has been against the interest of the common man.  For instance, according to press reports, Hong Kong and Shanghai Banking Corporation (HSBC) had indulged in financing terrorist and subversive activities.  Even today press reports say that this Bank enables free Havala transactions and functions as a conduit for staking black money in Swiss Banks.


The finance minister laments that the recommendations of the Second Narasimham Committee on bank mergers still remain on paper.  He wants to merge public sector banks to create two/three banks of international size and seven/eight national level banks.  He says that this is time for consolidation of the banking industry.  The very same finance ministry forces RBI to issue licences to the corporates for opening new banks.  Here the argument put forward is to create competition.  We want to know which is true; whether consolidation or competition.  Though both appear to be contradictory, the aim of the government is clear to cripple public sector banks and to extend red carpet welcome to the private corporates to play in the banking industry.


Despite the excellent service rendered by the public sector banks, regional rural banks and co-operative banks to the rural poor, we have to bear in mind that more than 50 crores of population do not have a bank account. 85 per cent of the people have no access to bank credit.  95 per cent of the 6,38,000 villages do not have a bank branch.  It is not time for consolidation of the public sector banks as claimed by the finance minister.  It is time for expansion of the public sector banking industry to the rural India.


One common reason behind the suicides of lakhs of farmers in the past ten to fifteen years is lack of long term institutional credit at cheaper rate of interest.  There is a tall talk of financial inclusion.  But in practice there is little improvement in this regard. The opening of three crores of bank accounts in the rural area in the past four years through the Business Correspondents (outsourced agents) has not provided any material relief to the needy.  Instead of opening more branches, and extending small loans to the poor and lower income groups of people, the government of India is moving in the exactly opposite direction.


The South Korea banned corporates to open new banks since that country faced financial crisis in 1997; the US itself banned corporate entry into the banking industry since its crisis in 2008.   The number of banks that  failed in the USA from the day the Lehman Brothers fell in September 2008 is as huge as 454 as of now.  That is nine banks have failed every month on an average in these 51 months.  It is very much within the common knowledge of the peoples of the world that the primary reason for their failure is that these banks remained under the private control.  Refusing to learn any lesson, the government of India wants to encourage private players and that too foreign private players in the banking industry which will surely be perilous to the interest of the common man.


Instead of taking meticulous steps to recover the bad loans euphemistically called non-performing assets (NPA), the government of India has brought legislation to convert NPA into equity of the very same delinquent company.  The defaulters are rewarded.  One can understand what would be the value of the shares of these companies.


In the first 22 years since independence, more than 500 private banks have collapsed endangering the depositors' money.  Corporates like Tatas and Birlas owned banks which practically served the interest of these business houses only.  That is one of the primary reasons why 14 major banks were nationalised in the year 1969 and six more banks were nationalised in the year 1980 during the regime of the Congress Party.  But the very same Congress Party led UPA-2 government contemplates to dilute public sector character of the banking industry and attempts to push the wheels of the history 43 years back.


The bank employees' movement is not prepared to take this retrograde move of the government lying low.  The three unions have decided to observe a day's strike not only to show their resentment and anger against the move of the government but to muster the support of the general public against the same.




OVER five lakh employees and officers of Banks stayed off from work on December 20, 2012 at the call of BEFI, AIBEA & AIBOA throughout the country protesting against the Banking Bills passed by the Lok Sabha on  December 18. Clearing operations were severely paralysed across the country and work was completely struck in over 65,000 bank branches. The striking employees and officers joined in massive demonstrations in all the metro cities, state capitals, important cities and district head quarters. United Forum of Bank Unions and All India Bank Officers Confederation had lent fraternal support to the strike and supportive demonstrations were held by activists of AIIEA, AIRBEA, AIRRBEA, All NABARD employees and officers Associations, etc, in major centres. Leaders of the striking organisations addressed the massive assembly of bank staff in all places. At Chennai, powerful demonstrations were held that was addressed by C P Krishnan (BEFI), E Arunachalam (AIBEA) and Nagarajan (AIBOA) who explained the diabolic consequences of the ill-designed moves of the government. Vijayan (CITU) and Ravi (AITUC) extended fraternal greetings and called for building further unity towards successfully observing the ensuing all trade unions’ strike action on February 20-21, 2013 to fight against the anti-worker and anti-people policies of the UPA government.