Bank union writes to Finance Minister against privatising PSBs

The Indian National Bank Employees Federation (INBEF), the banking wing of Indian National Trade Union Congress (INTUC), has said in the letter that privatising public sector banks (PSBs) would result in destroying their huge branch network across the country. 

“Should the PSBs be handed over to private corporates, it will not only be counterproductive, but also lead to self-destruction of a well-knit huge branch network across the length and breadth of the country that services crores of people,” the INBEF said in the letter. 

The union pointed to some gaps in the regulatory mechanism in regard to fraud played on the Indian banking system. “Besides supervision, the Department of Banking Operations in the RBI responsible for controlling the unwarranted risk in high-ticket advances is without a head ever since the then Deputy Governor SS Mundra retired in July 2017,” it said. 

“While there is a need to look into the performance of the Bank Boards Bureau, the transparency about the RBI policies during the tenure of then Governor Raghuram Rajan is being widely and openly compared with that of yes-men working presently,” it added. 

Last week, the Finance Minister had criticised regulators, as well as bank managements and auditors, for their failure to detect bank frauds and said that “politicians are accountable but regulators are not.”  

“What are our auditors doing? Both internal and external auditors really have looked the other way or failed to detect,” Jaitley said at an event here, without naming the PNB scam. 

The representatives felt, the current argument that over 20 PSBs is a large number runs contrary to the existence of 21 private sector banks, many of which are still on the fringes of the Indian finance even after remaining in operation for a considerable number of years.