Four organizations of bank officials said, “It is ridiculous that private sector banks have been given exemption in terms of rules for primary sector lending, branch expansion in rural / small towns, agricultural loans.”
Private sector banks were allowed to do government work.
Organizations of bank officials have opposed the Centre’s decision to allow private sector banks to engage in government business, including tax collections, pension payments and small savings schemes. Finance Minister Nirmala Sitharaman wrote on Twitter on Wednesday, ‘Private banks have been lifted the ban on the implementation of government related activities and schemes. Now all banks can join it.
Private sector banks can now be equal partners in the development of the Indian economy, the steps taken in the social sector of the government and improving the convenience of customers. In a joint press statement on Thursday, four organizations of bank officials said, ‘It is ridiculous that the rules for giving loans to private sector banks to primary sector, branch expansion in rural / small towns, matters like agricultural loans. Has been exempted. On the other hand, public sector banks have to comply with various rules including loans to primary sector, loans to agriculture sector. These associations of bank officials are… All India Bank Officers Confederation (AIBOC), All India Bank Officers Association (AIBOA), Indian National Bank Officers Congress (INBOC) and National Organization of Bank Officers (NOBO).
Private banks will be able to raise funds from the money of the poor – bank organizations
These organizations say that opening private businesses to government banks will help them to raise funds (float funds) to increase the benefits at the cost of the deprived and poor sections of the society. According to the statement, the Prevention of Corruption Act, 1988, Central Vigilance Commission Act, 2003 and RTI (Right to Information) Act are applicable to public sector banks while private sector banks are out of it. The organizations claimed that by allowing private banks to do government work, there would be no accountability of officers and employees of such banks.
PM Modi strongly supports privatization
Earlier on Wednesday, Prime Minister Narendra Modi strongly supported the privatization of non-strategic public sector enterprises, saying that ‘doing business is not the government’s job’. He said that his government is committed to privatizing government units in other areas except some public sector undertakings in strategic sectors. Modi said that running wasteful enterprises through taxpayers’ money wastes resources. These resources can be used on public welfare schemes.
Two state-run banks will be privatized
PM Modi said that the private sector brings with it investment, global best practices, best managers, change in management and modernization. He said that the money that will come from the sale of stake in public sector undertakings will be used for public welfare schemes like water and sanitation, education and health. The government is moving fast on behalf of privatization. In the Budget 2021, Finance Minister Nirmala Sitharaman has announced that two public sector banks and one insurance sector company will be privatized.
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(With language input)