The idea of privatisation of banks in India is a threat to public sector banking, said Jawaharlal Nehru University professor emeritus and Kerala State Planning Board former vice chairperson Prabhat Patnaik.
He was speaking after inaugurating the 20th All India Conference of the Corporation Bank Officers’ Organisation at Dr TMA Pai International Convention Centre in Mangaluru on Sunday.
“The credit policy of banks is very significant in determining the growth rate, income distribution, sector composition and so on, which are all the social issues. As far as social stability is concerned, the credit policy should be socially controlled. While lending loans, there should be a clear differentiation between speculation and an enterprise. But, this is not in the case of private banks. Privately owned banks give a lot of credit to speculative purposes, which will lead the entire banking system into deep financial crisis like what happened in the US, during the Great Depression,” said Patnaik.
‘Different targets’
The target customers of private banks are not common people. Public sector banks, however, support small enterprises a lot. But for the nationalisation of banks, there would not have been a green revolution, he explained.
Patnaik further said that it is not right on the part of the government to pressurise public sector banks for privatisation. Organisation General Secretary Eknath Baliga said that the government is battling for the privatisation of banks in the name of Strategic Debt Restructuring and Corporate Debt Restructuring, which does not suit Indian economy. The organisation will write to RBI in this regard, he added.
Trade Union Law
All India Bank Officers’ Confederation President Y Sudarshan said that the CBOO opposes the proposed amendment into the Trade Union Law, introduction of outsourcing system in public sector banking and FDI in banking sector.
Sudarshan, meanwhile, said that Indian Banks’ Association has been approached with regard to the fulfilment of several demands including the codification of punishments, adherence to regular working hours and so on.
Corporation Bank Officers’ Organisation Vice President G Raghavan presided over the inaugural function, while reception committee Secretary K S Karthik and others were present on the occasion.
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