The sole purpose of the merger of Public Sector Banks (PSBs) is to increase the size of the banks. Through this, half a dozen banks, each having its own culture, strengths and set of customers, are being subsumed into four large banks. Such undue rationalisation is bound to cause reduction in service points to customers, perhaps impacting the quality of services as well. There will be disruption of a large scale. Further, prospects for bank employees to move up will be less. Fresh recruitment will reduce, impacting the employment situation. Big loans may also bring in big bad debts. Frauds may increase. I only hope that this does not turn out to be another folly of the Modi government like demonetisation, where lakhs of Indians lost their businesses and jobs (Editorial, “Big bank theory,” Aug. 31) .
B.G. Baliga,
Thrissur, Kerala
Though the merger of banks is a welcome move, the haste shown by the government in announcing the mergers, at a time when the economy is in a difficult situation, is questionable. The earlier merger of Vijaya Bank and Dena Bank with Bank of Baroda has not had the desired effect. The government has failed to meet the then Finance Minster’s promise that concerns of staff would be taken care of and employees are facing mass transfers. The present set of mergers will only compound main concern of Indian banks, the burden of Non-Performing Assets (NPAs). The government, rather than focusing on bringing to book the economic offenders who fled the country after fleecing the banks, has engaged in a clear diversionary tactic. It would have done well to at least consult the unions of bank employees before making such a drastic move.
R. Giridharan,
Coimbatore