Bank union disagrees with RBI guv’s stand

MERGERS

ALL India Bank Officers Confederation (AIBOC), the largest officers’ organisation, condemned Reserve Bank of India (RBI) governor Urjit Patel’s comments on merger of Public Sector Banks (PSBS).

Referring to Patel’s statement that the Indian banking system could be better off if some public sector banks are consolidated to have fewer and healthier entities and that it would help in dealing with the problem of stressed assets of these banks, officers body said they were “deeply hurt” by his “irresponsible statement”.

History is replete with examples of failed mergers, it added. “In fact, most mergers do not yield the desired synergy and end up in fiasco. The Indian economy will be significantly affected by the mergers as it will shrink the number of branches. The economically weaker sections of the society will be deprived of basic banking services and would be gullible to the money lenders albeit in a different form. The RBI has been steadfastly refusing to divulge the names of top corporate wilful defaulters. His statement that the private sector banks are doing better is also not factual, Dhanlaxmi Bank Ltd, Catholic Syrian Bank Ltd and even Axis Bank are not doing well and we demand nationalisation of these banks,” said the statement.

Bankers body also urged Patel to make a statement on these issues to dispel many doubts about his “neutral” stance.