Bank strike over bad loans, for better wages must be taken seriously
Seven banking employee unions are on strike today, on February 28, and what they are protesting against goes much beyond the one-day crisis that customers will inevitably face. Needless to say that the objectives – asking the government to fix the bad loan crisis, demanding better wages, compensation for the extra hours put in after Prime Minister Narendra Modi’s demonetisation diktat, among others – are important and urgent now more than ever.
The public sector banks, it’s no secret, are under immense pressure to churn out loans, even to wilful defaulters, such Vijay Mallya, even when the NPAs, non-performing assets, which are loan that can no way of being recovered and are then recategorised as bad loans, are soaring.
A 2016 study found that NPAs had risen to 56 per cent and in the last two years, they had risen by 135 per cent, a sharp and steep rise over its slower, previous graph.
This isn’t just alarming: it’s a recipe for a concerted destruction and eventual privatisation of the banking sector, using the public banks as coffers to give out more money to the often defaulting private corporates. This is what the bank employees unions have in mind when they talk about “anti-people banking”.
It’s pumping in money, hard-earned, precious savings of citizens, as unrecoverable loans to big businessmen, turning the PSU banking sector into a private fiefdom of corporate-political nexus.
In addition, the demands made by the bank employee unions, such as labour reforms, better work hours, better wages, compensation for the extra hours put in post demonetisation, are demands that have huge repercussion not just for the banking sector but across the board. On September 2 last year, the labour union strike called by over 18 crore workers at least 10 Central Trade Unions, made similar demands and called for reforms against Modi government’s “anti-worker policies”.
Similarly, the taxi drivers’ strike - that brought private cab service in the country to a standstill - was aimed at drawing attention to the dangerously exploitative business model that Uber practices, not just in India, but across the world.
However, labour reforms would only comprise a small fraction of the massive overhaul and systemic will required to fix India’s ailing banking sector. The problem squarely lies with the state, which thrives on a ruthless mix of crony capitalism and anti-people policies, and in a way, gains from keeping the PSU banks diseased.
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| Photo: Estrade |
The allegation that state-run banks are just tools in the government’s hands to lay out populist doles is an extremely misguided one. This is a symptom of a larger malaise which is a government using the banking sector for political ends, not for genuine reforms. Privatising banking sector would leave out a staggering section of the population that is too poor to avail banking services, despite the recent coercive techniques used by the state to enforce banking on the truly cashless in the name of financial inclusion.
The immediate context is also the protest against the forthcoming merger of the five remaining regional subsidiaries with the State Bank of India, the biggest public sector bank which the government owns. The merger is likely to lead to massive lay-offs at a time when job creation has hit a severe low.
While the much debated demonetisation was something the PM just imposed on the Indian people, making their own money beyond their reach and liquidating 86 per cent of hard currency in one go, even the banks have been heavily distressed. Bank employees not only put inhumanly long hours to cope with the imposed rush, they became victims of abuse from an impatient and anxious crowd.
Moreover, banks struggled with low cash supply, the bungled cash deposits, the rushed counting of old notes, the wrong printing of new notes, the problem of fake notes and the thinning line between the RBI and illegal entities printing notes that had huge mistakes. The heavy burden went unnoticed almost.
While demonetisation became an excuse to recapitalise banks and forced deposits as well as the withdrawal limits improved cash liquidity in the banks, the government’s inability to see bad loans as a chronic problem which cannot have a one-time solution means that the issue is only going to aggravate. Reports already suggest that such is the case.
Public sector bank employees are therefore not just fighting for improvement of their own working conditions. They are fighting for the soul of India’s banking sector, which is captive to short-sighted and selfish netas and loan defaulting kings of good times.