The new session of parliament begins today, the day we celebrate our 52nd bank nationalisation anniversary. This may seem an ironical coincidence as the Narendra Modi-led NDA government is likely to move amendments in various banking laws to enable privatisation of public sector banks.

The push for privatisation of banks is coming at a time when some ailing private banks have been bailed out, one even with the help of the state-owned State Bank of India (SBI). In the past, dying private banks have also been rescued by public sector banks. How can we in this backdrop push through an agenda that seeks to sell stakes in public sector banks? It defies all logic as we are putting the hard-earned savings of the common man at risk.

The ‘nationalisation of losses and privatisation of profits’ will have dangerous consequences in a country which has a high level of poverty and income inequality. If banks are privatised, the focus of banking will shift from ‘social profit’ to ‘accounting profits’; banks will withdraw from rural and backward areas; lending to the farm sector, small trade and businesses will shrink; lending to corporates will further swell; and banks will increase their service charges.

In a private banking environment, jobs in the banking sector will fall drastically and contractual employment will become a common practice. These private banks will also control the savings of the common man.

Public sector banks serve the common man. They are handling 97% of Jan Dhan accounts and 98% of pension accounts. In social sector insurance schemes such as PMJDY, the share of public sector banks is 98%. Similarly, in education loans, it is 80%; in Swanidhi loan scheme for street vendors, it is 98%; in crop loan scheme, it is 95%; and in the 20% extra emergency loans to small and medium industries during the period of the coronavirus pandemic it is 90%. All the above figures are self-explanatory. Wherever common man's banking is there, it is the public sector banks which are providing the services.

If tomorrow these public sector banks are privatised, who will provide the services to the common man? Precisely with this in mind, we appeal to all members of the parliament to stand by the side of the common man keeping aside their political affiliations. As India is still plagued with issues of poverty and unemployment, banks should play the role of a catalyst and direct the financial resources to address these heart-wrenching issues.

The government’s argument for privatisation is that the public sector banks are in losses. The truth is that the public sector banks continue to be in operative profits for all these years. As of March 2021, barring two all the other public sector banks have booked net profit. For the last three years, a majority of the public sector banks were in net loss despite all of them enjoying operating profits. Why? Because of huge non-performing assets (NPAs) and write-offs, the major blame being big corporates.

As the crux of the issue is mounting NPAs, the solution to the problem lies in recovering those loan dues. All the existing instruments for recovery of dues such as Debt Recovery Tribunals, SARFESI Act and Insolvency of Bankruptcy Act have failed miserably. Much has been said about the Insolvency and Bankruptcy Code (IBC) but ultimately it has proved to be the way out for the corporates since in the process banks are required to take huge haircuts averaging 64% and even in some cases going up to more than 90%.

Bank unions are demanding amendments in penal code so that wilful defaulters can be treated for crime. We also want amendments in the electoral code of conduct to disqualify wilful defaulters from contesting elections. There also should be amendments in banking secrecy laws and the names of the defaulters should be made public.

The government should provide a better legal framework to recover overdues from NPA borrowers. This will enable banks to book net profits and the government can gain in the form of dividends. Banks will thus be able to book accounting profits along with social profits.

In 2014, public sector banks were handling business of about Rs 116.90 lakh crore on an employee strength of 4.99 lakh. In 2020, the business has grown by Rs 36 lakh to Rs 152.19 lakh crore while the number of employees has shrunk by over 1 lakh to 3.94 lac. This is the period during which large-scale retirements have taken place and more than 20,000 new bank branches have been opened. Banks have also been assigned to implement all sorts of government schemes. Thus, adequate recruitment needs to be done so that better customer service can be offered.

Since banking plays a vital role in the economy, banks should be owned by the government. Since it stands on the backbone of hard-earned savings of the common man, the funds should be used for the welfare of the people. Our slogan thus is: "People's money for people's welfare”.

Finance Minister Nirmala Sitharaman while presenting the budget for the year 2021-22 had made an announcement that IDBI and two public sector banks will be privatised. In case of IDBI, the act has been amended in 2002 and corporatisation was subsequently done. In case of all the other public sector banks, the government will have to amend the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. The government is likely to do this in the current parliamentary session.

If the government pursues its agenda of bank privatisation, it is the big corporates who are likely to become owners of those banks. This will ultimately jeopardise the interests of the common man. If we are to scuttle such moves, it is the common men who will have to raise their voices and protest.