STRIKING WHERE IT HURTS

The Banks are striking; yesterday and today. And if there is no redressal, they are planning to strike indefinitely.

Strike means to ‘hit’ and it does look like they are hitting where it hurts the most.

As PSU bank employees took to the streets, protesting against the privatization of two unnamed Public Sector Banks (PSBs), thousands of customers across the country felt the pain. Cheque clearances, demand drafts, pay orders, deposits, everything came to a standstill at bank branches but thankfully, online services remained operational.

Also, it was business as usual at HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank and IndusInd.

Privatisation of any PSU is a contentious issue for any Govt as dealing with the trade unions is a huge hurdle. No one really wants to take this risk. The Govt this time has decided to take the plunge, which is why it wants to test the waters with two banks first. But it needs to get this right.

The trade unions are not going to relent so easily; surely the Govt would have known that this was in the coming. The unions are protesting the privatization first for the obvious reason – fear of losing employment.

Working in PSBs means life-time employment but once it becomes private, performance will matter more. The job security which they enjoyed has come under threat. The unions have also voiced concern that once privatized, reservation policy will not be applicable, meaning impact on this category of employment.

The Unions are also protesting on an altruistic level – they say they are worried as PSBs could be taken over by big companies, the very same ones who are responsible for the huge NPAs. This does not make much sense because the very same companies also borrow from private sector banks but they are not sitting on as big a pile of NPA as PSBs. Its not just about the companies; it is the crony capitalism, the corruption and the inefficiency which has led to this NPA rot in PSBs and once privatized, that will at least reduce. Surely it will not as easy for say, Bajaj group, if they go on to own a bank to loot the bank. We are really not living in a banana republic. Yes, frauds have happened in private sector banks too, right under the nose of the RBI but are they as rampant as what we see in PSBs? This is a case of the pot calling the kettle black.

And there is one more reason – almost a noble reason, justifying this strike. The Unions are worried that privatization will put savings of depositors in jeopardy as there is a history of more private sector banks collapsing that any PSB. Well, PSBs were protected by the Govt and that’s the only reason why many PSBs did not go down under. But its not as though every private sector bank will collapse. This is a risk, no doubt but a calculated one.

Yes, the other reasons of the union do hold water – service charges in private banks will be higher and will drive out the common man and many rural branches could be shut down under the garb of non-viability. Loans to priority sector could also get sidelined.

Privatising a PSB is almost like going for a caste conversion, a complete cultural change. The Govt needs to sit down and talk this through with the unions. All the concerns need to be addressed and people need to be reassured about employment, inclusive banking. These are legitimate concerns. Unless the Govt does not see this through amicably, through proper dialogue, its entire divestment plan could go completely awry. As such the pandemic has put all math out of the window – for the current fiscal, as against the target of Rs.2.10 lakh crore, only Rs.21,302 crore has been raised.

Well, as we said, the Govt, this time around needs to talk. My way or the highway will not work every time.