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Until 1969, banks were in the hands of the Private sector. When the nationalisation of banks happened in 1969 and in 1980, the banking sector’s outreach had vastly increased and banks became accessible to the common people. The number of bank branches increased, along with a steady increase in rural branches,  agricultural credit from 0.2% of total advances to 19% and Credit-Deposit Ratio across the country.  Under the Lead Bank Scheme, every district in the country prepared and implemented a district credit plan. Integrated Rural Development Plan, Self Employment scheme, Small Industries Development, Small Traders Credit and Women Entrepreneurship Scheme were some of the many schemes implemented.  The country witnessed a reduction in poverty levels, income inequality and also paved the way for the Green Revolution in agriculture, Blue Revolution in fisheries and the White Revolution in dairy.  None of this would have been possible but for the nationalised banks.

But, a reversal of this intense long-haul process started in 1991. In the name of Liberalisation, Privatisation and Globalisation, efforts gradually started to handover the banking sector step by step to the private sector. There have been 31 strikes against privatisation due to which the Government was forced to go slow in this process. The merger of associates with SBI and reducing Public Sector Banks from 27 to 12, disinvestment of shares of LIC, the budget announcement to privatise public sector banks and one insurance company, along with the recent statement of FinMin that “Government has no business to be in business”, are few among the many initial steps towards complete privatisation of banking and insurance services. It is evident that soon all Public Sector Banks will become private and will be in the hands of corporates like Adani & Ambani. 

Hence, bank employees were on strike on 15th & 16th March with many Trade Unions and farmers association supporting this strike.  The General Insurance Employees went on strike on 17th March and LIC employees on 18th March.  

LIC was also created in 1956 by nationalising 245 private insurance companies as they were mismanaged then.  The Government had invested just Rs. 5 Crores back then and today the assets of LIC amounts to 34 Lakh Crores.  The Government is clearly undervaluing LIC to sell it to the private sector. LIC is the only organisation in the world that pays 95% of the profit to its customers as a bonus. Except for ₹5 crores no investment was made by Government but LIC contributes 20% of the Expenditure for five-year plan.
Privatising our public banks and insurance services will affect every citizen of the country.  Education Loan, Self Employment Loan, MSME Loans, Traders Loans, SHG Loans will also become costly and will be inaccessible for the poor of our country.  Insuring health, or goods or life will also become extremely costly and we may not get our money back, as was the case before nationalisation. This is indeed going to be the biggest loot in the country.  The banks together have almost Rs.150 crores as deposits.  Most of them are small deposits from households.  Inspite of low interest and high service charges, people have faith to keep this money in banks.  But will they be safe in the hands of private corporates? Never. The amount will be given as credit to Corporates and get looted as Non Performing Assets.  This will lead to a major financial crisis. Apart from looting these deposits, the corporates are aiming at the fixed assets- land and building of banks and insurance companies who have massive assets. Most of them are valued at ₹1 due to depreciation as per norms. But the actual market value may be more than ₹150 lakh crores. This has to be urgently stopped.

​But the battle is not going to be easy.  Nevertheless, we need to go to the people, students, youth, women, farmers, traders, entrepreneurs and appeal to them to join the struggle to Save Public Sector – Save India.  The Banking Trade Unions and All India Insurance Employees Association have taken the lead with the slogan “Let’s go to the People”. Let more efforts continue.

Thomas Franco is former General Secretary of All India Bank Officers’ Confederation.

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