The merger of ten nationalised banks in the country will lead to the closure of close to 300 branches in Gujarat, representatives of bank employees said here on Thursday.
Bank unions are taking government's promise, that there would be no job loss as a result of the merger, with a pinch of salt. They are drawing conclusions from the merger of associate banks with State Bank of India.
"It's government's own admission that 6,350 jobs have been lost across the country because of the merger of associate banks with SBI. In about six months job losses will start in Bank of Baroda and Dena Bank as well. With the merger of additional banks, more job losses will happen, whatever promises government may now give," said Janak Raval, General Secretary of Mahagujarat Bank Employees Association (MGBEA).
Raval anticipated that with the merger of 10 banks, as announced by the Finance Minister Nirmala Sitharaman recently, will result in close to 300 jobs in Gujarat alone and over 3,000 jobs across the country.
General secretary also alleged that the government of India is using the issue of merger of banks as a smokescreen to divert the attention of the countrymen from the economic slowdown the country is facing as well as to sidetrack the issue of bad loans faced by the banks.
"The country is facing serious economic slowdown and downturn. Banks, with huge resources at their command, can play a decisive role to revive the economy. Only last week, the Finance Minister has assigned important jobs to Public Sector Banks to give a boost to the economy. The decision to merge and close banks is a total diversion from these tasks," said Raval.
In a media statement, MGBEA said the merger is no panacea for problems faced by the banks. PSBs recorded a total gross profit of Rs 1,50,000 crore in 2018-19, but because of the total provision of Rs 2,16,000 crore towards bad loans, banks ended in a net loss of Rs 66,000 crore.
"Can anyone believe that the merger of banks will result in a recovery of the huge corporate bad loans? Rather, as we have observed after the merger in SBI, bad loans in SBI has gone up," said Raval.