Mazdor Ekta Lehar (MEL) spoke to Comrade JP Sharma, Vice President, All India Bank Employees Association and General Secretary, Delhi State Bank Employees Federation. Comrade JP Sharma (JPS) expressed his views on the current situation in the banking sector and the struggle being waged by the bank employees.
MEL: What are the main demands that the bank employees’ unions have been raising?
JPS: We have been consistently fighting against the privatisation of the banking sector. Our main demands are: stop anti-people banking reforms; do not privatise public sector banks; stop plan of merger of banks; do not allow corporate defaulters to kill our banks; take criminal action against wilful defaulters; recover corporate bad loans and do not write them off; do not pass on the burden of corporate NPAs on bank customers through hike in service charges. A mass rally was organised at Constitution Club on 19 July 2017, under the banner of United Forum of Bank Unions. This is a common platform for all banks, public and private. Many private bank unions have also joined the forum, including Federal Bank, Standard Chartered Bank, HSBC, Citi Bank, Kotak Mahindra Bank and ING Vysya. All public sector banks are a part of this forum, except State Bank of India which has its own separate employees association. Another agitation is planned on 22 August.
MEL: Is there pressure to privatize public sector banks?
JPS: Yes. Ever since the programme of liberalisation and privatisation was launched nearly 25 years ago, there has been a concerted effort to privatise the banking sector through various means. These have included gradual selling of equity up to 40%, i.e. partial privatisation, bringing more private players into the banking sector and reducing the government institutional shares, eventually leading to privatisation.
MEL: How has the introduction of private players in the banking sector affected the client base of public sector banks?
JPS: It has certainly reduced our client base in the cities. Private banks offer various schemes and services such as credit cards with attractive offers, banking facilities delivered to your doorstep, etc. to attract the younger generation of workers. They are concentrated in urban areas where the number of customers who would be attracted to and use these facilities is very large. Unlike the public sector banks, the private banks are not obliged to serve the rural banking sector. The responsibility to implement social services and schemes like Jan Dhan accounts, loans to farmers, etc. has been put on the public sector banks. So you see, private sector banks do not have to offer the kind of services, particularly in the rural and less developed parts of the country, that the public sector banks offer. How can public sector banks be expected to compete with the private banks, given such a different client base?
MEL: How have the working conditions of employees in public sector banks been affected by this?
JPS: As a part of the pressure to compete with private banks, more branches of public sector banks are being opened, without increasing the number of staff. The existing employees in older branches are being transferred and redeployed in the new branches, increasing the work load tremendously. The working hours have been increased to match the working hours of private banks. In the private banks, employees are hired on short term contracts. They are greatly overworked and have no job security. Now they are trying to bring in such changes in the working conditions of public sector bank employees as well.
MEL: The Finance Ministers of the present and past governments have been promoting consolidation of the banking sector. What has been the impact of this consolidation?
JPS: With various banking functions becoming automated, there is pressure on the public sector banks to reduce establishment costs through transfer of excess staff to newer branches. Consolidation is also reducing job opportunities. Many posts in which the employees have retired remain vacant. Whatever new staff is being recruited, is being done on contract basis like the private sector banks. Existing staff in state associate banks are being forced to take voluntary retirement. Through all this, the government is preparing the grounds for eventual privatisation of the public sector banks.
MEL: How have NPAs affected the public sector banks?
JPS: The NPAs are draining the public sector Banks. We have been demanding that the government must initiate criminal cases against wilful defaulters. But various governments have only been promising and doing nothing. In fact, the figures of NPAs reported by the government are also not accurate. The real figures are hidden under various heads. Debt restructuring in the interests of the big corporate defaulters runs into tens of thousands of crores, but this is not reported. In the name of “protecting privacy of customers”, legally we cannot even make public the names of defaulters.
The decision on how to deal with NPAs is taken on a case-to-case basis. This decision is taken by the board of governors of the banks. Unlike earlier, when there were two functional heads, CEO and MD, nowadays all powers are concentrated in the hands of one CMD. The Board of Governors includes representatives of big corporate houses. This however is not seen as conflict of interest. Moreover, there is a national Act defining the composition of the Board of Governors. According to this act, bank employees and officers unions too are supposed to have their representatives on the Board. But for past three years, no member from the employees or officers unions has been nominated to the Board.
In fact, the government and the corporates are working hand in glove, to loot the public sector banks and then present them as a case for privatisation.
MEL: What has been the impact of demonetisation?
JPS: Demonetisation came as a big shock for the public sector banks. Despite the claims of the government of its intentions behind demonetisation, one can clearly see nine months later, that none of those ‘intentions’ have been achieved. During the first month of demonetisation all the bank employees were forced to work extra hours and many of them have not yet been compensated for those extra working hours. They had to face public ire, due to shortage of currency supply. Large amount of fake notes entered the system, as there was pressure to exchange, without adequate checking procedures in place. As per the procedure, any case of fake currency is supposed to be recorded and notified to the police. No such thing could be done under those circumstances when there were long lines of customers to be served.
In the days following the announcement of demonetisation, the media tried to portray all public sector bank employees as ‘crooks’. Public sector bank employees were unjustly blamed for giving out fake currency notes. It is not possible for them to have done so. There is a proper accounting of how the currency reaches the bank and gets disbursed. All currency is held by RBI and currency chests are under the control of RBI. The currency that is issued to the banks is completely accounted for. There have been instances in which the RBI claimed that in some particular bank fake currency was given out. There is no way of finding out how the fake currency was exchanged, because nowadays the bundles of notes are not stapled but loose, so we cannot identify a bunch of notes to a particular source. In all such cases where fake notes were reported, a collective punishment has now been imposed on the bank and everyone working in the bank is required to compensate for it out of their own pockets. But the employees are perfectly justified in resisting it.
More currency was supplied to the private banks than to the public sector banks. No one knows where all the old hard currency has gone. The government says they are held in the currency chests with the Reserve Bank of India. We have demanded a CBI enquiry into the entire demonetisation exercise and where all the currency has gone.
MEL: The government has promised to waive loans of farmers. How is this going to be implemented by the public sector banks?
JPS: The last time loans of farmers were waived under the previous government, it was done by the central government, which also controls the RBI and all public sector banks. So the amount waived off was adjusted in the books. This time the waivers are being announced as the responsibility of state governments, which don’t control the banks. The government has claimed that the banks will be compensated through budgetary provisions. But till now no such budgetary provisions have been announced at the central or state government levels. So it is not clear how it will actually be implemented.
MEL: What has been the impact of GST on the banking sector?
JPS: The introduction of GST has affected the bank operations. The service charge has been increased from 12% to 15%, causing additional burden on customers. The software has had to be updated, causing additional burden on the employees.
MEL: How will the banking sector be affected by fall in interest rate?
JPS: The fall in bank interest rates is directly in the interest of the big corporate houses. They would get cheaper loans for their business. This may also assist in boosting the government’s much publicised “Make in India” campaign, which so far has had few takers. But it will hit the common account holder badly. His bank saving interest rate, which does not even compensate for inflation at present, will be further reduced. So in effect, you will lose out by depositing your money in the bank. It will severely impact the people who depend on the bank deposit interest for their survival, like retired people. It will also impact the interest rates on EPF and PPF, affecting ordinary workers.
MEL: What is your vision for the banking sector?
JPS: Our vision is very clear. Banks should serve the interests of common people. We have over 6 lakh villages in India, of which only 6% have banking services at present. Banking services should be readily available to every person in the society and should serve their needs. Our vision is social banking. It is the public sector banks which can service the rural and far-flung areas of the country, not the private sector banks who will not consider it profitable to do so. We are demanding that banking should be a fundamental right.
Public sector banks work to fulfil certain social objectives. They serve the really needy sections of the society, such as poor farmers, students etc. Public sector banks also finance many infrastructure projects of the state such as railways and roadways. The private banks focus on housing loans, loans for food processing and other profitable industries. They focus on the retail sector and offer them good interest rates. Some private banks have also been alleged to be involved in unethical business of money laundering, etc.
MEL: What is the plan of action of your organisation in next few months?
JPS: On 10th August we are planning conventions all across India, including Delhi. On 16th August we plan to organise demonstrations at all centres. On 18th August we will organise dharnas at all state capitals. On 22nd August there will be an All India bank strike. On 26th August the employees will wear black badges as a mark of protest and organise demonstrations during lunch time, all across India. On 15th September we are organising a march to Parliament.
MEL: What is your message to our readers?
JPS: We see how the government changes, election after election, but there is no real transfer of power into the hands of the people. We bring these parties to power but we ourselves remain powerless. This is a big contradiction in the present system.
During the elections, the working class and peasants are not able to act in their own interests, but instead they are divided by the political parties on caste and religious lines. During the elections all basic issues of employment, roads, education, health, etc. are pushed to the background. Only the agenda of the big political parties, set by the interests of the big corporate houses, dominates. They create artificial issues of mandir-masjid, triple talaq, gau-raksha, etc. and want to keep people fighting on these issues which have no relevance to their conditions of life. Elections in this system do not offer us any real choice.
It is necessary that we rise above these artificial issues which are used to divide and divert us. It is important that we organise as the working class and unitedly fight for our rights. During elections we must bring forward and vote for working class candidates, who will defend the interests of the working class and all oppressed sections.