Bank employees stage protest against Centre's move to merge PSU banks

Members of the All India Bank Employees' Association on Saturday staged a protest in Chennai against the Centre's decision to merge 10 public sector banks into four entities. Employees of all public and private sector banks wore black badges to work as a mark of protest to the government's decision. The Association's General Secretary, C H Venkatachalam said that the government's move was "ill-timed" and needs a review. A rally opposing it was also planned by the Association, Venkatachalam told PTI. He alleged the merger of public sector banks would mean the closure of six banks.

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Centre merges 10 PSBs into 4 banks

The BJP government had on Friday unveiled a mega plan to merge 10 public sector banks into four, to create fewer and stronger global-sized bankers as it looks to revive economic growth. Finance Minister Nirmala Sitharaman said 10 public sector banks -- Punjab National Bank, Canara Bank, Union Bank of India, Indian Bank, United Bank of India, Allahabad Bank, Syndicate Bank, Corporation Bank, Oriental Bank of Commerce and Andhra Bank would be merged. "Government may call it a merger.. six banks which have been built up over the years will disappear from banking scenario", Venkatachalam said. He recalled that when the financial recession was experienced world over in 2008, the domestic banking system was safe because of public sector banks. On the further course of action, he said the Union would meet in New Delhi on September 11 to decide about the strike.

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Changes in the banking sector

The Finance Ministry has announced multiple reforms over the last 10 days to address the economic slowdown, with the mega-merger of banks being the latest measure. The Ministry also instructed the banks to finish the consolidation process in a smooth manner. Along with the mergers, the Ministry also announced a slew of administrative changes. Listing the advantages due to this move, FM Sitharaman has said that there will be great cost reduction due to network overlaps and cost-saving for the joint ventures among others. India will now have 12 Public Sector Banks from 27 Public Sector Banks after the merger. Chief Risk Officers will now be appointed from the market, announced Sitharaman. Sitharaman also declared that the fees of the non-official directors could be increased. She added that they would now function like independent directors. 

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