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Bank mergers are not beneficial: Employee Association
Why is it in the news ?
- The All India Bank Employees Association (AIBEA) has opposed the Centre’s decision to merge Bank of Baroda(BoB), Vijaya Bank and Dena Bank.
- The association believes such a merger would not be beneficial either to the employees or people at large.
More in the news
- The United Forum of Bank Unions (UFBU) has called for a nation-wide strike on December 26 to protest the move. AIBEA is a constituent of UFBU.
- UFBU is a consortium of nine bank unions, which represent over 10 lakh bank employees and officers in the country.
- BoB, Dena Bank and Vijaya Bank have a total NPA of Rs.80,000 crore.
- Would these bad loans would be automatically recovered if these banks are merged,” the association asked.
- It said the need of the hour was expansion of the banking industry and not consolidation as the banking density in India was relatively low compared to many countries in the world.
- However, the Centre argues that mergers would make banks stronger globally.
- But acoording to AIBEA, even if all 21 public sector banks are merged into one, the combined capital would be only around $3 billion. We cannot match these global banks in terms of their capital strength.
- Hence, mergers would not make our banks equal to those global banks.
Source
The Hindu.