CONSOLIDATION WILL SAVE PRIVATISATION

Mixing up the issues and not reaching to a conclusion - we Indian enjoy very much. Several issues we tie up, make it a bundle and expect that they should be sold like hot cake in the similar fashion as MBOs - structured products being sold out in USA a year ago. It is worth mentioning that despite of being at paramount level of financial innovation, bundling the mortgages and ultimately hiding the risk has finally resulted in sale of “Bear Stern” and closure of several financial institutions in US.

In the trade unionism, particularly in PSU Banks trade unionism, the herd-like behavior is more rampant. Members of these bank trade unions have umpteen beliefs in their trade union leaders. These umpteen beliefs give unlimited powers to these trade union leaders- be it welfare of the bank employees or the interest of bank itself and finally, forces these leaders to take their members for granted.

Though one cannot deny that historically these bank unions have saved their members from the clutches of draconian managements prevailing during those days and given their members some benefits of collective bargaining due to which at one time bank officers were reaping the benefits better than those of their peer IAS cadre officers.

But time has changed now

Post liberalization these bankers are loomed to have eschew themselves from the benefits of the liberalization. Officers of PSU Banks are waiting at the bank of the shallow river of hope whereas their colleagues in private/ foreign banks are taking the driver seat in enjoying all the benefits.

Peanut salary, minute yearly increment, slowest possible promotional opportunities, frequent transfers, risk of getting entrapped to frauds for someone’s mistakes, chances of advances turning NPAs and accountability fixed therein, running from pillar to post for deposit-mobilisation……..all these are adding woes to the PSU bank officers.

If a survey is conducted on these beleaguered officers of PSU banks, it would not be surprising to find most of them at the risk of heart attack or weight gain or disease like cancers. It appears that bank unions and their leaders have stopped seeing seriously the plight of their members. It is quite appalling that these leaders have been observed to put up their whole of energy in the matters, which are not supposed to be their area.

Few Modern (at least for name sake) Indian banking trade unions have been baking their breads by forcing themselves in some unchartered territories. Merger and privatization are the two issues, which they want to sell like hot cakes to their members. They are awry of the threats like merger and privatization as these will put an end to the their business that they were doing all these years without being questioned by any one.

It is altogether most disgusting to see that instead of playing a role what the trade unions are playing elsewhere in the world, our bank trade unions are keeping their eyes closed and misleading their members. Instead of following a model example of TATA-Corus merger and the role played by trade unions in that direction, our banking trade unions are led by a few Leaders, having only two prime issues: one is Merger and another Privatization. How long they can keep themselves in oblivion that both these are contradictory?

HOW CONSOLIDATION WILL SHIELD AN ORGANISATION FROM PRIVATIZATION?

If merger process is augmented with the merger of small PSU banks with big PSU banks, automatically those small banks will be saved of any hostile takeover post 2009. Sale of small under performing banks to the private banks has already been mentioned in Raghuram Rajan Committee report.

It has been proved in USA and Switzerland that BIG Banks like Citi Bank, Bank Of America and UBS AG have not succumbed to hostile takeover by other institutions despite having written down more than $349 billion (approximately Rs1535600crore at1$=Rs44) of their assets in sub prime mortgage crisis, on the contrary more than 7 small banks of US have been either closed down or sold to big banks.

“A big and large entity resists and does not succumb easily to any hostile takeover.”

Lehman Brother (a big investment bank of USA) was able to bring an equal amount of capital on the same day when it has declared losses. The big organization still enforces belief in the mind of investors, and hence small PSU banks need to merge before 2009.

At the time when all PSU Banks Chiefs (except PNB Chief) have urged through IBA to bring down Government stake in PSU Banks to 26%, consolidation will save the small banks.

So if you are opposing merger means you are throwing the small banks in the hands of some private industrialists.

Both merger and privatization are threats to the businesses of few stubborn leaders, who have been given certificates to run this business for their whole life. It has culminated into divorce of this leadership from issues of benefits of their members and tie up with the issues like merger and privatization.

It is worthy to note here that in the last one-year we have participated 6 times in such strikes on the issue of merger and privatization and lakhs of officers have lost their salaries without any fruitful result.

It is interesting to note that when left was supporting the Government, our trade unions, were not able to clinch any such demand against merger and now when left is not seen anywhere they want to fight against the Government on the issue of merger. These unions are showing a never-fulfilling dream to the members that Government/SBI will stop the consolidation process in the country once they go for strikes. How long this myopia would be surmounting in the banking atmosphere that is ripe to plant and nurture the merger?

CONSOLIDATION IS IN THE INTETREST OF FRAGILE INDIAN BANKING: LET US OPPOSE ANY ANTI MERGER MOVE BY FEW ASSOCIATION LEADERS WITH VESTED INTEREST NEGLECTING THE MEMBERS' CAUSE