55th Bank Nationalisation Day - AIBEA Press release 18 July 2023

ALL INDIA BANK EMPLOYEE ASSOCIATION (AIBEA)

Press Release

by C.H. Venkatachalam, Gen Secretary, AIBEA

WE HAIL 55TH BANK NATIONALISATION DAY – 19TH JULY 1969 – 2023

Nationalised Banks are Nation building institutions Privatising Banks is anti-people

18-7-2023

19th July, 2023 marks the successful completion of 54 years since the major privately owned Banks were nationalized in our country. Thus, 19th July, 2023 marks the 55th Bank Nationalisation Day. It is an important occasion for us to celebrate because AIBEA played a crusading role in fighting and achieving the nationalization of Banks.

Thanks to the vision of the founding fathers of AIBEA, this demand was in the womb of AIBEA right from its founding in 1946. For more than two decades thereafter, AIBEA campaigned, agitated and after a bitter struggle, AIBEA achieved this demand of very significant political importance. That is why celebrate this achievement.

Com. Prabhat Kar who was a Member of Parliament from CPI and also General Secretary of AIBEA in those days played a leading role is raising the demand repeatedly in the Parliament and also building up a big struggle by the bank employees.

In our country which is still a developing economy, banking plays a crucial role in propelling development and growth. Because all the banks were in private sector and the major private banks were controlled and owned by the big capitalists, they were concerned only with their profits and not bothered about the country’s needs.

For needy segments and needy sections, banking service, particularly banking credit was not accessible. Thus private banks were just profit making machines for the capitalists and industrial houses. Hence arose the patriotic demand to nationalise the Banks to make them subservient to broad-based economic growth and progress.

This demand was ridiculed by many as not achievable. Many others were skeptical. Industrial houses, capitalists and owners of the Banks were angry. Government was unhappy and irritated with the demand. But AIBEA was determined to fight for the demand.

From our Trivandrum Conference held in 1964, AIBEA declared a massive struggle. Com. Prabhat Kar and Com. Parvana gave the clarion call for a sustained struggle. Bank employees were in peak of agitation all over the country demanding nationalization of Banks.

In 1966, Congress Party lost power in many States because there was increasing distress in rural areas and people were losing faith on Congress Party. Hence Indira Gandhi took decisions to address these issues. But these progressive measurers were being opposed by many leaders within the Congress Party.

Around 1969, the problems within the Congress Party between Indira Gandhi and Morarji Desai widened and India Gandhi announced various progressive decisions. This created a congenial political situation to pursue our demand. Communist Party, AITUC and other progressive forces also echoed our demand.

Com. Prabhat Kar was a Member of Parliament from 1957 to 1967. He used to raise the demand inside the Parliament on every occasion and mobilized support of various political parties and MPs.

The time was ripe. Madam Indira Gandhi plunged into the decision and on 19th July, 1969 her Government promulgated the Ordinance.

The Banking Companies (Acquisition and Transfer of Undertakings) Bill, 1969, clarifying the objective and reasons for bank nationalisation, mentioned as under:

“The Banking System touches the lives of millions and has to be inspired by large social purposes and has to subserve national priorities and objectives, such as rapid growth in agriculture, small industries and exports, raising of employment levels, encouragement of new entrepreneurs and the development of the backward areas. For this purpose, it is necessary for Government to take direct responsibility for the extension and diversification of banking services and for the working of the substantial part of the banking system.”

For AIBEA it was a vision come true. The whole country and all political parties hailed this progressive measure except Swathantra Party(does not exist now) and Jan Sangh (former name of BJP). Thus AIBEA scripted a golden chapter in the political events of our country.

Bank nationalization transformed the banking sector in a big way. Branches were opened in rural villages. Bank loans were given to hitherto neglector sector on a priority basis. Common masses could access banking services.
People’s money in the banks became safe and guaranteed. After five decades, the nationalized banks have become the main engine driving our economy.

The growth, sweep, and contributions of nationalized Banks have been phenomenal.

Attempts to privatise Banks: But under pressure of the Corporates, the government wants to privatise our banks and hand them over to the capitalists so that they can loot and plunder the public savings available in the Banks. This is the danger today. AIBEA has been resisting and fighting against this retrograde move of the Government.

Call for Strike: If there is any step taken by the Government to proceed with privatisation of our Banks, immediately, AIBEA will give a call for countrywide strike to oppose such moves.

AIBEA demands recovery of bad loans from big companies: The only major problem in the Banks today is the increasing bad loans because of the default by big corporate companies. We have been demanding action against them to recover the loans. But Govt. is giving them more and more concession.

For the past 6 years, bad loan accounts are referred to Tribunals under Insolvency and Bankruptcy Code IBC. Instead of loan recovery, these loans are being sold to some other companies for cheap rate and Banks have made huge losses.

IBC has become a method to loot public money because Banks incur huge hair cuts and sacrifice in these deals. Defaulters escape without any penal action on them. Another Corporate Company is taking over these loans at cheap rates.

NPA - IBC HAIRCUT STORY Rs. In crores

Where the profits go: as on March, 2023 – Public Sector Banks Total Gross Operating Profit : 2,28,414 crores
Net Profit after provisions : 1,00,814 crores

Thus, the bulk of the profits ( 56 % of the profits) earned by the Banks goes for provisions for bad loans and write off of bad loans, etc. Thus people’s money is being looted by the Corporates.

Just as we fought for nationalization of Banks, today it is our patriotic duty duty to defend public sector banks and fight to defeat the attempts of privatisation. This is our prime task. Our main demands are:

• STRENGTHEN & EXPAND PUBLIC SECTOR BANKS
• STOP PRIVATISATION OF BANKS
• NATIONALISE ALL PRIVATE BANKS
• RECOVER CORPORATE BAD LOANS
• TAKE CRIMINAL ACTION ON WILFUL DEFAULTERS
• STOP HAIRCUTS, WRITE OFF & CONCESSIONS
• INCREASE RATE OF INTEREST ON DEPOSITS
• REDUCE SERVICE CHARGES
• INTRODUCE 2 TIER SYSTEM IN CO-OP. BANKS
• MERGE RRBS WITH SPONSOR BANKS
• ADEQUATE RECRUITMENTS IN ALL BANKS

Banks are nation building institutions; they must remain so. We should not allow Banks to be privatised and handed over to the greedy Corporates. People’s money should be utilised for people’s welfare and not for private corporate loot. National savings should be utilised for broad-based national development and not for embezzlement by the private corporate defaulters. With these demands and tasks we celebrate the Bank Nationalisation Day.

Save Public Sector Banks – Save economy - Save people – Save Nation

C.H. VENKATACHALAM, GENERAL SECRETARY