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The proposed privatization of two state-run lenders has cast a pall of gloom over bank employees who fear loss of jobs and pensions, with unions vowing indefinite strikes to counter any adverse announcement. People who joined government-owned banks with job security in mind believe that while mergers largely did not lead to job losses, privatization will.

Union finance minister Nirmala Sitharaman announced in the FY22 Union budget that the government will reduce its stake in two public sector banks apart from IDBI Bank. To be sure, she said in March that privatization would not hurt the interests of employees.

Though the government has not named any bank yet for privatization, various news reports have pointed to Central Bank of India, Indian Overseas Bank, and Bank of Maharashtra as likely candidates.

“We are not sure about what is happening. I have a colleague who left a cushy job to come work at the bank and is now worried about losing his job," said a banker at one of the three lenders mentioned above. Several bank employees have died during the two waves of covid-19 and now the lack of clarity on jobs is quite frustrating, he said.

Others said that privatization would be unfair to those who joined these banks considering the benefits of being in the public sector. Changing the structure of these institutions, they said, would make it difficult for many to adjust to.

“Many employees are worried that even if there is no direct retrenchment, there might be large voluntary retirement schemes, pushing people to leave," said Devidas Tuljapurkar, convener of the United Forum of Bank Unions (UFBU), an umbrella body of nine bank unions.

Tuljapurkar believes that attempts could also be made to outsource several jobs, leading to retrenchment in clerical roles. “While officers might not bear the brunt of such measures, clerical jobs are at great risk if privatization is implemented," he said.

“At the moment, we are going by what the finance minister said a few months ago and awaiting clarity from the government. However, I should mention that in case the scheme is detrimental to employees, we will go on indefinite strike unless such measures are rolled back," said C.H. Venkatachalam, general secretary of the All India Bank Employees’ Association.

There is also simmering disquiet among a section of employees with regard to the role played by bank unions during these uncertain times. However, Venkatachalam believes that while earlier agitations have not been able to stall bank mergers, it allowed harmonization of service conditions of employees after merger. The pace at which bank branches closed because of mergers has also slowed down, he said.

Experts have said that privatization will face challenges. Rating agency Fitch has said that political support for the required legislative changes could be a significant hurdle.

“There could also be more resistance from the trade unions this time. The unions will be against the withdrawal of the state ownership safety net. The success of the plan would also require sufficient interest from investors willing to acquire large stakes in state-owned banks and run them," it said in a report on 7 June.

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