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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RJD surprise element in J’khand polls, party candidates leading in 5 of 6 assembly seats
Ranchi(PTI): The Rashtriya Janata Dal (RJD) has emerged as a surprise element in the Jharkhand assembly elections with its candidates leading in five of the six seats where the party is contesting, according to trends available on the Election Commission's website on Saturday.
RJD candidates in five assembly seats were leading over sitting BJP legislators.
In 2019, RJD had secured only the Chatra seat where its nominee Satyanand Bhokta won.
In Deoghar, RJD’s Suresh Paswan was leading by 19,581 votes over his nearest rival and BJP's sitting MLA Narayan Das after the third round of counting.
RJD’s Sanjay Prasad Yadav was ahead by 19,867 votes in Godda over BJP MLA Amit Kumar Mandal after the sixth round of counting.
In Koderma, RJD nominee Subhash Prasad Yadav, who was out on bail, was leading by a margin of 3,471 votes over BJP’s sitting legislator Neera Yadav.
Subhas Prasad Yadav, considered to be one of the close aides of RJD supremo Lalu Prasad, was recently granted bail by the Supreme Court in a money laundering case.
Party’s Naresh Prasad Singh was leading by 5,159 votes after the fourth round of counting over BJP’s Bishrampur MLA Ramchandra Chandravanshi.
RJD's Sanjay Kumar Singh Yadav was also leading from Hussainabad by 8,213 votes after the fourth round of counting over BJP MLA Kamlesh Kumar Singh.
Party’s candidate Rashmi Prakash, however, was trailing from Chatra by 3,776 votes.
Bhokta did not contest the elections this time, and his daughter-in-law Prakash was given a ticket.
