Unbankably yours

The backdoor privatisation of nationalised banks is underway and does not bode well for this mammoth sector. With an RBI working committee headed by Axis Bank chairman P J Nayak suggesting that the government cut its holding in PSU banks to below 50 per cent and give it a majority private sharehold, the bank servicemen’s unions are rightly up in arms. The major bank associations, including All India Bank Employees’ Association, All India Bank Officers’ Association, among others, would hold protestations on Friday, 23 May, but it remains to be seen if their grievances would be heard in the wake of increasing thrust towards disinvestment. The divestment would naturally affect the 10-lakh strong service industry and many bank employees would unfairly face the axe. Moreover, PSU banks hold the country’s precious monetary capital and squandering it to reckless private players would be tantamount to selling off the national resource to dubious dealers. Nayak panel recommendations include merger of public sector banks, transferring ownership of PSU banks to a bank investment company, repeal of the Bank Nationalisation Act and SBI, as well as bringing Companies Act, besides increasing voting rights of shareholders in PSU banks to 26 per cent from 10 per cent. While an overhaul of the public sector banking is long due, going back to pre-1969 model of private sector banking in this age of crony capitalism may siphon off our money to unscrupulous corporate sharks, or may create a credit lending bubble like the one that led to 2008 crash.