ANTI-MERGER HYPOTHESIS OF PSBs

ANTI-MERGER HYPOTHESIS OF PSBs:
Myth & Reality!--- by Sri J. N. Shukla

With the nationalization of private Banks in two traunches in 1969/80, 90% banking business was brought under public control by the government. There was a big picture behind this decision that now needs no explanation looking to gigantic dynamics & strides PSBs made in last 50 years of nationalization. Now, PSBs are the the custodian of peoples' savings that constitute national wealth. With the change in ownership from private to government, total objectives were changed and most important one was class banking to mass banking. Business priorities were redefined and a new credit policy came into being with conscious endeavor to make available credit support to every sector of economy. I don't think, we need much discussion on importance of PSBs and it's ownership status.

My considered view with regard to ownership is that only a government of fools can think to wash it's hands from control & ownership right of PSBs and privatize them. Despite permissible dilution under Act, so far even half could not be done. Therefore, privatization is a myth not reality at all.

Today, another hot subject is merger. Some says it's murder of banks, while some calls it closure. I think, people have freedom to use words that appeals and stands to the logics & reasonings. It's simple 'merger' of different identical entities into one for greater business synergies. It's neither 'closure' nor 'murder'. No burial or last rites of the sort! Well, at best one may call it as disproportionate outburst to appease someone or abuse other.

 Landmark questions are: what was earlier, when all 7 Associate Banks along with Rastriya Mahila Bank had merged in SBI; Vijaya Bank, Dena Bank merged in BOB from 1.4.19?
Earlier 196 RRBs, almost all perpetual in red, were consolidated into 56. Barring 2/3, all have turned around. Now, 56 are proposed to be compressed into 35 and that's not far when there will be one national RRB or no RRB since all merged in their respective sponsoring PSBs.

Merger, acquisition, consolidation have been going on processes from ages. It's nothing new, that's happening now or end with this. Historical fact is, so far, none of the mergers had failed.

Questions are raised about density per branch, need of expansion. It's not denying fact that there are unbanked areas. But at the same time there are multiple PSBs Bank Branches in same or adjoining bldg or on same street with 50/100 meter distance. After Associate Banks merger, SBI had to look into this situation and swap/close such multiple branches. What's important business or number of branch? SBI didn't retrench anybody. BOB, DB, VB too didn't retrench anybody. We must note that PSBs are national resource, which cant be put to waste. Optimum use of resource is in national interest.

Late Prabhatkar/Parwana immediately after nationalization said, PSBs can't work with private model of management, organization and business policies. They demanded consolidation of nationalized banks alike to nationalized general insurance companies. Prabhatkar fought for credit policy and he succeeded. Prabhatkar launched powerful movement for reorganization of PSBs and under pressure of movement, the government appointed several committees. New Bank of India was first PSB merged in PNB. Was it not as per Unions demand?

It is said, merger is being done to divert public attention from NPAs, from merger SBI NPAs surged, NPAs recovery would be laxed. Nothing is hidden from public glare. When 7/8 banks are merged in SBI, its but natural that SBI NPAs would swell. Recovery is a procedural and time taking process. Banks can just put efforts. So these are just baseless issues being dragged in to negate merger as good step forward in the best interest of PSBs.

People are provoked that consolidated banks won't serve small people, big banks are not good banks, PSBs won't be strengthened from consolidation. These are just myths to confuse people. Too big too fail, yes. It can, as had happened in western world in 2008 sub- prime crisis. But, could you ignore the ownership and business policies of those western Banks which collapsed? PSBs are different, regulated differently. This is quoted just to frighten innocent people who didn't know working and business models of western banks.

Now, let us examine the impact of merger on existing workforce, job security point of view. As explained above, in earlier mergers none were retrenched. So, there is all reason to believe that in proposed mergers nobody would be retrenched. Reason: Banks are already under-staffed. Regular works are outsourced. Cross selling of third party products are playing havoc on work force. I don't find Unions looking to work pressure side. Irrespective cadre, work pressure is madding for all cadre. No attention is paid to thousands of temporary temporary workers on paltry payments. For Unions it were real issues, but now it's none of their business. As far future job opportunities are concerned, look to past, had ever new recruitments were done commensurate to retirement?. All banks have maintained least regular manpower policy and optimized outsourcing. All ATMs cash management is outsourced. All guards in branches/ATMs are out sourced. Peons are temporary, so where is issue of job opportunity? Wuth Multiple cash/ payment dispensing digital channels, still we live in dreamland to explore the possibilities of job opportunities.

There is a great amiss. Banking fraternity is in deep crisis and their Unions in sheer disarray, confusion and indecisive state of mind. They are in tug of war among themselves. What's the right course to tackle tricky wage, pension and other service conditions. Leave IBA, they have set their goal. Problem is with other side, i.e. Unions who could not decide so far as to who will do what. Dharana, FM meeting postponed. Officers call on Secretary and having transpired something, better not discussed here,  strike of 26/27 Sept. was deferred. Now, two Unions are going to prove their might on 22.10.2019 while rest shall be on looker. Merger is a reality like dawn. Accept it & greet it. Look forward to have a good day. I don't know, when it would be understood that strike is no more paneacia to address HR issues of high tech based Banking. Here, cart is put before the horse. It's myth & reality as well.

-J. N. Shukla
PRAYAGRAJ
30.9.2019