AIBEACIRCULAR NO. 26/95/2011/12 5TH July, 2011
C.H.VENKATACHALAM
TO ALL UNITS AND MEMBERS :-
Dear Comrades,
19TH JULY 2011
42nd ANNIVERSARY OF BANK NATIONALISATION
19TH July, 2011 marks the 42nd Anniversary of Bank Nationalisation in India. It was on this day 42 years ago in 1969 that the Government nationalised the 14 major private Banks in our country. It was a watershed event in the socio-economic-political life of our country. May be it was a political decision but no one can dispute the socio-economic background in which this important decision was taken. The manner in which our nationalized Banks have grown and contributed to our national economic development in the last 42 years signifies the importance of that decision. AIBEA is proud that it played a leading role in the campaign and struggle for nationalisation of banks.
From the period when the Banks were the hand-maids of private industrial houses and business tycoons, the Banks have come to be owned by the Government. From the situation where it was class-banking i.e. catering to the rich and elite class, today there is transformation to mass banking when banking is touching the lives of everyone.
From those days when the Banks were opening branches only in important towns and cities and where factories were located, today, bank branches have proliferated to the interior villages. Banks and banking services have become accessible to the common masses. Banks have been able to mobilise the precious savings of the people in a big way. Banks have been able to extend credit to economic segments which were earlier neglected. Nationlised Banks have become an engine for the basic economic growth and development.
From those days when the Banks were opening branches only in important towns and cities and where factories were located, today, bank branches have proliferated to the interior villages. Banks and banking services have become accessible to the common masses. Banks have been able to mobilise the precious savings of the people in a big way. Banks have been able to extend credit to economic segments which were earlier neglected. Nationlised Banks have become an engine for the basic economic growth and development.
Achievements:
1969 | Now (PSBs) | |
NO. OF BRANCHES | 8268 | 75,000 |
NO. OF RURAL BRANCHES | 1863 | 36,000 |
DEPOSITS | 4,665 cr | 44 lac cr |
ADVANCES | 3609 cr | 33 lac cr |
Public Sector Banks:
31-3-2010 | 31-3-2011 | |
Deposits | 36.92 lac crores | 43.73 lac crores |
Advances | 27.01 lac crores | 33.06 lac crores |
Operating Profit | 76,945 crores | 100,050 crores |
Net Profit | 39,257 crores | 44,886 crores |
Challenges:-
On the one side, our Public Sector Banks have done yeomen services and have become a part of India’s growth story. On the other hand, our Public Sector Banks have a long way to go to achieve their basic objectives for which Banks were nationalized.
Despite this stupendous expansion, banking services have not reached everyone. 95% of the villages do not have Bank Branches. 99% of the villages in the North East do not have Bank Branches. 99% of the villages in the hilly and tribal areas do not have Bank Branches. 60% of the people do not have even a Bank Account. 90% of rural population does not have access to banking services. 52% of farming households do not have access to bank finance. 85% of women are financially excluded.
90% of the weaker sections – Dalits, Tribals, Poor, Differently abled/Physically challenged and Minorities are not financially included. The task of total financial inclusion is a major challenge to the Banks today. Similarly, credit to agriculture sector is inadequate. Credit to agriculture and farming sector through banking finance has come down while private money lending to them is on the rise.
90% of the weaker sections – Dalits, Tribals, Poor, Differently abled/Physically challenged and Minorities are not financially included. The task of total financial inclusion is a major challenge to the Banks today. Similarly, credit to agriculture sector is inadequate. Credit to agriculture and farming sector through banking finance has come down while private money lending to them is on the rise.
What is needed :-
More and more branches should be opened in the unbanked rural areas. More and more credit should be extended to agriculture, rural development, poverty alleviation, employment generation, education and health sectors, etc. Agriculture credit should be available at cheaper rate of interest and credit should be available in time.
Attacks:-
But unfortunately, due to the reforms agenda pursued by the Government, banking sector is sought to be liberalized. Privatisation attempts are still on. Government is availing loan from the World Bank to capitalise our Banks thus bringing their conditionalities to the doorsteps of our Banks.
They want merger of Public Sector Banks. They want to delete section 12(2) of Banking Regulations Act to remove the existing ceiling on voting rights in Banks. They want to hand over our Banks to foreign and private capital. They want to allow industrial houses to start Banks. In short they want consolidation and shrinkage of public sector banking and expansion of private sector banking.
Growing offensives in Banking Sector :-
- Privatization of Public Sector Banks
- Dilution of Government’s Capital in PSBs
- Availing loan from World Bank to capitalise our Banks
- Subjecting our Banks to World Bank conditionalities
- Merger of Public Sector Banks
- Allowing unrestricted FDI in Banks upto 74% at the discretion of RBI
- Removing the existing 10% ceiling on voting rights in Private Banks
- Encouraging Foreign Banks
- New Bank Licence Policy to allow industrial houses to start their own Banks
- Growing NPAs and Government’s inaction to take stringent measures for their recovery
- Attempts to hand over RRBs to NBFCs and other private hands.
- Weakening the Co-operative Banks by denying their capital requirements
Public Sector Banks are nation building institutions. Nationalized Banks are national assets. Banks deal with public money and national savings. In a developing country like India, people’s money should be available for people’s welfare. National savings should be made available for national economic development and not for private corporate loot. Banking should be vehicle for economic empowerment of the masses and not instrumental for embezzlement of public money. Willful default of loans and writing off of these NPAs are a national loot and day-light dacoity.
Under the glorious banner of AIBEA, our unions and members have a special role to play. In addition to our fight for better wages and service conditions, we must fight for effective banking policies.
On this 42nd Anniversary of Bank Nationalisation, let us all take the pledge :
To defend Public Sector Banking
To defeat privatisation attempts
To strengthen Public Sector Banks
To ensure best customer services.
With greetings,
Yours Comradely,
C.H.VENKATACHALAM
GENERAL SECRETARY