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1


 
Business

Centre not to privatise banks
Sep 14, 2008 17:00
BY OUR CORRESPONDENTNew DelhiSept. 14: The finance ministry said on Sunday that the government does not propose to transfer control and management of public sector banks to the private sector.The United Forum of Bank Unions UFBU has threatened to go on a two-day strike on September 24-25 to protest against the merger among the public sector banks, their privatisation and regarding the amendment in Banking Regulation Act.The finance ministry said that recommendations made by the Raghuram Rajan and the Anwarul Hoda Committees relating to development of the financial services sector are currently under discussion at different levels. &ampquot;No decisions have been taken so far,&ampquot; it added.On the issue of merger of public sector banks, the finance ministry said that it has always maintained that the initiatives for consolidation in the banking sector have to come from the management of banks themselves. The government will only play a supportive role as a common shareholder.However, it added that the process of consolidation is necessary to improve the state of competitiveness of Indian banks globally. &ampquot;Some banks are engaged in the process of dialogue with their employees and officers to forge a consensus in favour of consolidation. At present, government has no proposals before it from banks for merger,&ampquot; said the statement.The finance ministry said that there is no proposal to remove ceiling on voting in the PSU banks but only in private sector banks.The statutory ceiling on voting rights is retained at 10 per cent in the case of the SBI and its subsidiaries and at one per cent in the case of nationalised banks, it added.Finance ministry said that it is of the opinion that the proposed strike is uncalled for and unjustified. &ampquot;It will greatly inconvenience the public at large as 80 lakh persons visit the branches of public sector banks on an average working day. In addition, the clearing houses managed by the public sector banks may also be affected,&ampquot; it added. &ampquot;Besides a strike in public sector banks will only drive more customers to deal with private sector banks, jeopardising the interests of public sector banks.&ampquot; 



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