The public sector banks which were the lifeline of the economy and that served the poor and provided jobs to socially backward classes will soon be a thing of the past.
Mr Modi’s government is planning to amend the banking legislation and come up with new law privatising all the public sector banks in Parliament this rainy season session.
The government share in banks now is 51 percent and Mr Modi’s government is trying to reduce it to 26 percent. Except for SBI all banks are likely to be privatised to begin with IOB and Central Bank of India.
Once there were 30 public sector banks and after the merger, the number became 12. These banks employ 8.26 lakh personnel mostly those belonging to SC, ST, and OBCs and there is no guarantee that these communities employment once banks are privatised.
The Public Sector Banks are the only source for farmers and the poor and middle classes to obtain loans and safe to deposit their hard-earned money.
Mr Modi and his advisors should remember that the Non-Performing Assets (NPA) which was just three percent in 2012 rose to 14 percent in 2018. Of which 84 percent of NPAs belong to corporates. It may be noted that a big businessman who is close to Mr Modi obtained loans from public sector banks to buy two ports and one airport.
Many economists opine this as a regressive step and deny reservations to the SC, ST, and OBCs besides affecting the poor and middle classes across the country.
By Gollapudi Srinivasa Rao