Merging of banks: Reform or damage control measure?
The merging of banks is in news in the recent days. The government is calling it a reform of banking sector. This could be one of the many blunders that the government could be making in order to cover up for the many blunders to bail out the banks that have suffered many setbacks with economic burden of bad loans. Demonetisation was another massive blooper that way and the country is still paying for that mistake.
Three major public sector banks of the country – Bank of Baroda, Vijaya Bank and Dena Bank would be merged to make good for the bad loans given out to companies. This is being projected as a ‘reform’ which is not the case. But if the centre thinks this step will help the banks get better, it is nothing more than a pipe dream. In the recent times Bank of Baroda had reached some healthy space fiscally due to its decisions. But that process will now hit a roadblock.
Finance minister Arun Jaitley has been giving statements to bank employees that the government is trying to protect the interest of all banks with this step. No employee will probably face an unsavoury situation regarding his/her work owing to this merger. In the past, the subsidiaries of State Bank of India had merged to form a single identity. But the employees had complained of their professional life being affected by that merger. They have said they face discrimination before the SBI main employees. Their promotions and increments have been badly affected.
Decisions relating to public sector banks have caused a deep damage to the economy. Public sector banks comprise 2/3rd of the banking sector in the country. Non-recoverable loans and non-performing assets are major problems that cannot be solved easily. Their illness has become quite a bit of a deterrent in making the economy any better. New loans are hard to come by. Jaitley has been saying merger of banks is the only solution to all this.
It’s an old news that big banks gave massive loans to mega corporate companies that turned into a huge bungle. The banks will now have to take corrective measures before doling out loans to big companies here after. Many bank managers are undergoing mental torture owing to investigations that are in progress on having facilitated loans for big players of corporate companies. A few reconciliatory measures have to be initiated to bring back the confidence among bank managers in this regard.
It would be downright unwise to merge a few public sector banks and create conducive atmosphere for the government in its economic affairs. The government does not have a proper response to the question that raises concerns about merging small banks to create a bigger bank. Any organization that turns big, also brings big problem with it. If that fails in that form in the future, the problem it leaves behind is also big enough to tackle.
Today the government has to work on sorting out the mess. A team of managers has to be built who can work without political interference to help find a solution to this issue. Political pressure on bank managers is a common thing that’s known to all. Some higher level managers would be speaking for bigger power houses within their banks all the time. They hesitate to initiate action when the defaulters are big industrialists or entrepreneurs. This has turned into a bigger menace for public sector banks. The step to merge banks to tackle this crisis, thus hoping to lift the banks from quagmire, is another disaster in the making. The government should know danger lies right ahead of this decision.
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Eid celebrated with fervour across Karnataka
Bengaluru (PTI): Eid-ul-Fitr was celebrated with religious fervour and gaiety across Karnataka on Saturday, with thousands of people offering special prayers at mosques and Eidgahs, marking the end of the holy month of Ramadan.
In Bengaluru and other major cities, people gathered in large numbers early in the morning to offer namaz, exchanged greetings of "Eid Mubarak", and visited relatives and friends. Markets wore a festive look, with brisk business reported in garments, sweets, and accessories in the run-up to the festival.
Karnataka Governor Thaawarchand Gehlot, in his message, said, "May this Eid ul-Fitr bring joy, peace, and prosperity to all our citizens celebrating around the nation. As Ramadan month concludes, let us continue to cherish the values of compassion, generosity, and unity. Eid Mubarak to everyone!"
Chief Minister Siddaramaiah, who participated in a mass prayer programme, extended greetings to the Muslim community and underscored the importance of harmony and compassion.
"Praying for the welfare of humanity is essential," he said.
"Praying for the well-being of humankind is essential, and people should live with mutual love and trust, guided by humanity. India is a country of diverse religions and cultures, and in a nation marked by unity in diversity, everyone must live together harmoniously. No religion preaches hatred; all religions advocate love," the chief minister added.
Deputy Chief Minister D K Shivakumar, in a message posted on 'X', said, "May this Eid bring happiness and prosperity. Eid Mubarak!" Festive meals, including traditional delicacies such as Seviyan (vermicelli) and Biryani, were prepared in households, while charitable acts and distribution of food and alms marked the spirit of the festival across the state.
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