Daijiworld Media Network - Bengaluru (SP)
Bengaluru, Jan 18: All India Bank Officers Confederation (AIBOC) has accused the union government of violating rules governing acquisition and transfer of government undertakings in merging Dena Bank and Vijaya Bank with Bank of Baroda. AIBOC state secretary, S K Srinivas, made this allegation at a press conference he addressed here on Thursday January 17.
Srinivas asserted that the announcement of merger of these banks made by union finance minister, Arun Jaitley, after obtaining cabinet nod for the same on September 17, 2018, was unilateral, and that it is against the interests of the shareholders of the banks. He felt that this decision was backed by prejudice, and has the potential of harming the turnover and financial stability of the banks besides adversely affecting the interests of bank employees.
He questioned whether there is a guarantee that the banks will continue to protest interests of the customers after the merger. "Vijaya Bank has been serving its customers in a far better way than the bigger banks. While bigger banks have been incurring losses, Vijaya Bank has earned net profit continuously since the last three years. Will all the problems affecting banking get resolved post merger? There are many instances including State Bank India where mergers have failed," he argued.
He also pointed out that because of hard work put in by its employees, Vijaya Bank has succeeded in pegging its non-performing assets (NPA) to 6.7 percent of its gross credit as compared to 12.5 percent in case of Bank of Baroda and 22.7 percent in case of Dena Bank. He felt that before the merger, Bank of Baroda should have been asked to bring down its NPA level to that of Vijaya Bank.
Srinivas demanded for the initiation of legal action against bank defaulters and make public the list of bank defaulters. He warned that unless the banks carefully take measures to clean up their credit portfolio, a day will come when the banks will lose their business to private finance companies.