Business & Investment

Bank Strike: A “Huge Mistake” to Sell PSU Banks to Companies, says Workers Planning a Strike, Raghuram Rajan

New Delhi: Former RBI Governor Raghuram Rajan has become a formidable ally as some public sector bankers have been on strike for two days starting Monday in protest of the privatization of state-owned lenders.

In an interview with PTI, Rajan questioned the success of inefficient public sector bank privatization and added that it would be a big mistake if they were sold to businesses.

“I think it’s a big mistake to sell a bank to an industrial park,” he added, adding that selling a decent-sized bank to a foreign bank would also be politically infeasible.

This could boost the United Bank Limited Forum (UFBU), which called for a national strike protesting the privatization proposals of two state-owned lenders, which are likely to affect banking services on Monday and Tuesday. ..

Many public sector lenders, including the State Bank of India (SBI), have informed their clients that a planned strike could affect their normal operations in branches and offices.

Rajan said the 2021-22 budget had a great deal of emphasis on privatization, but the history of the government that made this happen was confirmed and this time he wondered how it would be different.

The government budgeted Rs 175,000 from the sale of shares in public sector companies and financial institutions, including two public sector banks and one non-life insurance company, in the next fiscal year beginning April 1. .. Sale target with huge margin.

The government succeeded in privatizing IDBI Bank in 2019, but it was acquired by Life Insurance Corporation of India, which is owned by the government itself, and effectively retains the ownership of the bank. Apart from that, the government has succeeded in consolidating 14 public sector banks in the last four years.

Regarding the privatization proposals for the two banks, Rajan said there was little detail on how this would be done. Former RBI chiefs said perhaps one of India’s private banks might be in a position to buy a public sector bank, but it’s unclear if they have a desire for it.

Impact of Bank strike
Strikes can affect services such as branch deposits and withdrawals, check clearing, and loan approval.

In a statement, UFBU, an affiliate of nine unions, claimed that about 100,000 rupees of bankers and bank officials would join the strike.

(This story uses PTI content)



Bank Strike: A “Huge Mistake” to Sell PSU Banks to Companies, says Workers Planning a Strike, Raghuram Rajan

https://economictimes.indiatimes.com/markets/stocks/news/selling-psu-banks-to-corporates-colossal-mistake-says-raghuram-rajan-as-workers-plan-strike/articleshow/81494577.cms Bank Strike: A “Huge Mistake” to Sell PSU Banks to Companies, says Workers Planning a Strike, Raghuram Rajan

Back to top button