In the wake of RBI’s decision to transfer Rs 1.76 lakh crore to the government as per the recommendations of the Bimal Jalan-led committee; and Modi Government’s the decision to merge 10 Public Sector Banks to carve out for large banks, a public debate titled ‘RBI’s Reserve Fund Transfer & Banks Mergers: A Loot or Boost?’ was organised by Financial Accountability Network India, a collective of civil society organisations, unions, people’s movements, students, teachers and concerned citizens to highlight the issues of accountability and transparency of the national financial institutions.

The meeting was addressed by Sitaram Yechury, General Secretary, CPI(M); Prof Jayati Ghosh, Centre For Economic Studies and Planning, JNU; Prof C P Chandrasekhar, Centre For Economic Studies and Planning, JNU; Paranjoy Guha Thakurta, Senior Journalist and author; Dr Thomas Franco, Former General Secretary, All India Bank Officers’ Confederation; VK Tomar, Secretary-General, National Confederation of Officers’ Associations of Central PSUs; and Purushottam Sharma, CPI (ML).

Speaking on the occasion, Sitaram Yechury, General Secretary of the Communist Party of India (Marxist), said, “The transfer of RBI’s surplus to the government destabilises the RBI, makes India vulnerable in an on-going global and domestic recession.” On the government’s decision to merge 10 banks, Yechury said, “This was done at the behest of corporates, who have been demanding this to deal with one bank than the consortium of banks for the loans.” He stressed that the CPI(M) will oppose these decisions with all its might.

Dr Thomas Franco, Former General Secretary, All India Bank Officers’ Confederation, said, “Bank Merger is against The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, which stipulates that the consent from board and shareholders is mandatory.” He accused that the money will be used to bail out the struggling corporates.

Speaking on the occasion, Prof Jayati Ghosh, Centre For Economic Studies and Planning, JNU, said, “RBI’s autonomy died on Nov 2016 when the government declared demonetisation. The present government is the one without any accountability. The economic mess India is in also stems from this.” Speaking on the RBI’s decision to transfer money, she said, “Government is messing up with public finances. The RBI’s money will go towards plugging in the holes created by the demonetisation and hastily implemented GST.”

Prof CP Chandrasekhar, in his presentation on the bank mergers, argued that the government doesn’t care about the long-term solutions and consequences of their actions. All they want is to be seen as doing something. He said, “The government has kept two relatively bad banks with one good bank. This new entity can’t lend more than their assets as apart from their assets bad loans also get added”

Senior journalist and author Paranjoy Guha-Thakurta argued that RBI must have a healthy reserve to prevent the depreciation of the Rupee. In his presentation, the veteran journalist pointed towards the fudging of the key data. “The current economic situation is so bad that despite the government’s best efforts to distract people with article 370, Balakot and Ram Mandir, certain economic downfalls are becoming too difficult to hide under any smokescreen, the most important being the automobile industry with multiple companies shutting down their production units for a definite time periods. The state is still in denial about the implications of demonetisation,” he added.

VK Tomar, Secretary-General, National Confederation of Officers’ Associations of Central PSUs, expressed disappointment on the treatment being meted out to the PSU. He said that the government is now trying to get rid of PSUs. Giving an example of British India Corporation, which has not paid salary for the last 24 months, he said this is the situation in many of the PSUs.

Calling the bank merger as bank murder, Purushottam Sharma of CPI (ML) accused the government of hiding the massive loot of PSBs through this measure. “Economic loot has been the bulwark of Modi govt and it has been time and again testing people’s resilience to fight back through draconian measures like demonetisation, indiscriminate mining, transferring airport, railways, and BSNL into the hands of the corporates etc,” he added