Banking Scenario

Denationalisation is in Full Swing

Aswini Kumar Pramanik

Those who are in the banking sector as employees, as executives or as trade unionists are very much concerned about their fate. The industry has undergone sea change during the last five years, so to say. The merger question apart, the disinvestment had started a long time back toward the process of privatisation. Major Banks have sold out the government share up to 25% or even more to the public and accordingly the public directors are enlisted in the Board of Directors of those banks. The remarkable thing is that the representatives from the employees' side -award staff and officers alike have been driven out from the Board. Even though debate was there as to role of those employees' directors in the crucial Board meetings, the representation was a very conceptually significant indicator of the system of management in the socio-economic perspective of the day. It was acknowledged that the employees have a say in the management of the bank which is a public institution. But the privatisation move has taken away all those privileges of the employees or their representatives. There was a gossip that the employees' Directors would enjoy the five star cultures but did nothing for the employees' sake. Whatever be the fact, the numbers were the determining factor in taking any crucial decision as regards the future of the bank. And that had happened. The employees’ directors were driven out by the decision of the Government and they could do nothing to prevent it.

And now, the banks have decided to be merged by the Government and the Board of Directors has nothing but to give their affirmation to that decision. Again the Government had in the Budget proposals declared that they would sell two public sector banks to the intending buyer in this financial year. The names are doing the rounds in the industry corners. The Government had sometimes divulged the names. But the reality is that there are no buyers as such to buy those banks. The names like UCO Bank, Bank of Maharastra, IOB and the like have lost all attraction to the buyers in a volatile market. Even though they are earning profit, the buyers are not showing much interest in them. In case the Government takes the decision to sell a bank , the Board of Directors of that particular bank has to sign their death certificates ,with pleasure, of course. The rumour has it that the big industry houses are much more interested in big banks like Canara Bank or Bank of Baroda who have good standing in the market. They are waiting behind the curtain to hear from the Government the decision to sell these banks and to celebrate the completion of privatisation of the banks. The question is which will be the next to be sacrificed to the greed of the private monopoly houses?

But before the privatisation of the big banks to begin, the process of in-house privatisation will be completed. Just imagine the process: the cart before the horse and not the reverse which is but the normal order. A paradox? How? Let us cite some concrete examples to corroborate the theme:

*    Recruitment of Arm Guards: Before merger of some big banks it was transparent that the personnel management affair gained topmost priority. The privatisation move also gears toward the very end of reducing the employees' strength to ensure highest profit. The policy for recruitment of employees at different cadres is a direct reflection of this end. Here of course, the first target is the better unionised award staff. The Arm Guards ensure the effective yet secure bank functioning .But the recruitment of this cadre is in absolute chaos. The banks are running with dire deficiency of arm guards in huge number of branches. The bank is following a very cost effective recruitment policy of requisitioning arm guards from security agencies on contractual basis. Apart from their poor salary from their recruiting agency, they don't get any PF, Pension, other compulsory allowances permissible to a permanent award staff of the bank. State Bank of India has been the pioneer in this respect. Others are to follow the suit.

*    Recruitment of Clerks: The major chunk of recruitment in banking industry comprised, after nationalisation, clerical cadres and probationary officers. It continued till mid eighties. There was a lull for a long period of time in this regard. The new army of clerical staff and officers of different scales began thronging the branches and offices of the banking industry only around 2010. Now again the old phenomenon had started repeating. According to a senior trade unionist of Canara Bank, the recruitment of clerical cadre in a big bank like Canara Bank had come down to poor 500 posts all over the country while the same for officer cadre is 2500. Implication is amply clear .Bank is concentrating on officers as its main pillar and not otherwise. This would then alter the pattern of staff strength in the Bank. Once the majority strength of clerks and other employees who came under the purview of different Awards will no more be the majority force in Banks .The place would rather be occupied by the officers.

      This is on the whole the picture of staff pattern in almost all major banks. This was the target of the Narasingham Committee recommendations I & II for decontrol, merger and ultimately, privatisation of the banking industry and these have been painstakingly pursued and ultimately achieved by the bank management and the government after decades of concerted effort through Bipartite settlements and other measures.

Trade Union Movement
*    Needless to say, this would bring a huge change in the trade union movement too in the entire banking industry. The trade union movement since the fifties till date has been dominated by the workmen cadre unions. It would now be dominated by the officers' unions on the basis of sheer strength. Here is the staff position in a branch :

      Before 5 years Now
Clerks > 40 5
Officers> 5 5 + 4 (managers).

The drastic reduction is observed in clerical cadre. This is however, the picture of a particular bank branch but the overall picture at the industry level will not be much different though with slight variation, here and there. The recruitment of clerical cadre vis-a-vis officers' one as mentioned above only vindicates this position.

      The struggling spirit of the workmen unions may naturally be subdued to a great extent and may not be replenished by the Officers' unions /associations.Their service rules necessarily restrict their struggling spirit a lot. It itself heralds a change in struggle itself. However, it is difficult at this moment to forecast the course of that movement led by unions/associations of officers. It cannot be ruled out that the new work pattern may metamorphose the lower rung of the officers themselves to take up the baton of the workmen's struggle to the permissible extent. As of now the bank management and the Government are in a position to dictate terms to their employees of all cadres even if those terms flout the settled norms of the bipartite settlements. The irony is that the employees are forced to comply with those dictates without fumes.

Board of Directors
*    Almost in all the banks, Government's stake has been sold to public through issue of shares to the extent of 25% or even more. Now, they intend to maintain only 25% or even less than that of the shares of the Bank. Accordingly, the Board of Directors will be represented proportionately by the percentage of shares implying that there will be major portions of directors from monopoly corporate houses or their lobbies.

*    The impact of this will be seen in policy making, deciding credit policy, NPA resolutions etc. During the Government possession, humongous amount of bad debt of the corporate houses had been written-off/liquidated. Canara Bank itself has written-off 1.29 lakh crore of bad debt of the corporate houses It may not be a surprise if a good number of public sector banks go red overnight as is witnessed as a real life phenomenon in developed capitalist economy. After all, the industry leaders as well as the ruling elite are very much enamoured of the policies of the developed world and cite them every now and then. And after all, they have a mission and a vision, too and that is privatisation. Till now, they have achieved their goal of reversing the purposes of Bank nationalisation to give the orientation towards class banking from that of mass banking. And privatisation has dealt a death blow to those policies and orientation of mass banking.

*    Now this is the harsh reality before the banks go for full privatisation. One can imagine what else the real privatisation would bring in the industry or more particularly to the employees. Actually, it is more than privatisation in real terms. It is better being termed as privatised public sector, a paradox indeed. The number of corporate sector private banks have gone red in the past few years and the public sector banks have come to their rescue at the instruction of RBI or the Government. The corporate houses have therefore, realised that they would not be much troubled if their banks fail. The Public Sector Banks are there. So they can take huge amount of loans from the public sector banks and indulge in non- repayment of those loans. The Government has nurtured till date this motive of the corporate borrowers. Result: the public sector banks are going to be liquidated in not too distant future. The Government intention is abundantly clear-either to sell the banks to the private monopoly houses directly or implement the privatisation process under the nameplate of public sector.

*    Pending privatisation, the Bank management under the Government's instruction is closing some sections of the bank. The works are being outsourced. For instance: the Printing Section is no more in Canara Bank: Printing works have been outsourced.

*    Currency Chest is persisting : Receiving and remittance have been outsourced.

*    HKP staff exists : But cleaning and sweeping of branch premises outsourced.

As far as the Bank of Baroda's case is concerned, outsourcing has been forcefully tried to be implemented violating all norms of industry-level settlements. Reference may be made to the clause 31(h) of VIII Bipartite Settlement dt 02.06.2005 wherein it is clearly stated that “while it shall be bank's endeavour to retain/re-skill staff and to develop in-house competencies, they may outsource IT and its related activities in respect of specialised areas where in-house capability is not available." So for sweeping, in-house competency is sufficiently available and outsourcing, therefore, violates the provisions of BP settlement. Moreover, since sweeping is a permanent and perennial kind of job, outsourcing of this job is in total contravention of the Contract Labour (Regulation & Abolition) Act 1970. But who cares for all those laws?

The management of BOB has not placed any indent for last 2 years with the IBPS for clerical recruitment. On the other hand they are intent on doubling the number of Business Correspondent and want to get the clerical jobs done by them. This mode of outsourcing is a direct attack on job security of the award staff. BOB employees are also on the warpath against this outsourcing.

Outsourcing of permanent and perennial type of job is not the monopoly of the above two banks. The other banks led by State Bank of India are implementing it violating all the industry level settlements and the existing law of the country. The total number of Business Correspondents (BC) in the banking industry hovers around 5,26,000 as per NABARD statistics. The question is how the banks could violate the industry level settlements and engage such a vast number of BCs.Obviously, it couldn't happen without the patronage of the Central Government. The central Government wants the banks to trim their workforce before ceremonial privatisation.

True to say, the outsourcing function had started in the nineties itself with the operationalisation of the computerisation in the branches. Outside agencies were deployed for data feeding. And now it persists in variegated forms and in different sections of the bank and industry. Every moment it is expanding its horizon. Every moment an advancement for privatisation.

The privatisation of the public Sector banks is not the agenda of this Government only. It is a long drawn struggle of a major section of the ruling class of the country since the days of nationalization. Even before nationalisation, while a section favoured nationalisation as the panacea for all ailments of the economy deeply drowned in chaos and thought it the appropriate step to preempt any social upheaval, the other section strongly opposed it. This deep chasm in their economic purview led to political splits in the oldest party with deep future ramification. But ultimately, in the last days of eighties and in the early nineties, the country witnessed the beginning of the end of that policy of nationalisation when the new economic policy came into existence. Now the chasm became irrelevant. There was the competition between the rival camps as to who was more ardent in implementing the new policy. The trend still continues and policy of privatisation, liberalisation is not the monopoly of any particular camp now .These are omnipresent and all encompassing. Not sparing even the left camp wherever they are in power. Is it a melodrama? Is it a commitment of both the camps to protect the system in a roundabout way? The tragedy is that the antagonists even shy away from telling the employees the history of that old struggle.

However, it is a fact to remember that the Governments policies and projects like Jan Dhan projects in the present regime are channelised through Public Sector banks and not through Private Banks. Actually, one objective of nationalisation was to cater to the people’s needs through huge branch network and that part was played by the nationalised banks very satisfactorily. Today also no pause to that tradition. Today there is the demonetisation and umpteen social projects of the Governments where the employees risk even their nights of rest to implement those projects. These proves their commitment to the people and makes at the same time the policy of nationalised banking a milestone of glorious service to the nation. Private sector banks on the other hand had so far no such record to their credit.

But who cares? The monopoly houses are eyeing on the big profit making banks to make them their next hunt.

[The writer is a retired Bank Officer and can be contacted through the e-mail id:]

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Vol 55, No. 20, Nov 13 - 19, 2022