Bank officers union opposes govt plan to cut stake in state lenders
Reduction in the govt share in the profit-making public banks would also lead to rise in non-performing assets, says union
Jaipur: Opposing the government’s plan to reduce its stake to 52% in public sector banks, All India Bank Officers’ Confederation on Saturday said such steps would ultimately benefit private players. General secretary Harvinder Singh said reduction in the government share in the profit-making public sector banks would also lead to sharp rise in non-performing assets.
“Privatization of profit and nationalization of losses appears to be the policy of the government which is neglecting our pending demands. It is also considering reducing stakes in profit making state run banks that will be not a good decision," Singh, who was here for annual general body meeting, told reporters.
“Government should arrange capital for the banks instead of reducing it," he said. Minister of state for finance Jayant Sinha on Friday told the Lok Sabha that government is “considering" to bring down its equity in the state-owned banks as it would reduce budgetary requirement for capitalization of PSU banks. “The step would substantially reduce the requirement of budgetary provision for infusion of capital in public sector banks," he had said in a written reply.
Sinha further said “the reduction of government share in equity capital of PSBs to 52% will enable mobilization of ₹ 89,120 crore approx on the basis of current market price on November 21".
There are about two dozen public sector banks and government holding in them is between 56.26% and 88.63%. The government has infused an amount of ₹ 58,600 crore since 2011 in these banks. PTI
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