After Finance Minister Nirmala Sitharaman announced the mega merger of public sector banks, the All India Bank Employees Association staged a protest denouncing the move and calling it unmindful and illogical. They have said there has been no attempt to merge weak banks with strong ones or some geographical considerations have been applied.
In a Mint report, they have said that the decision to merge United Bank with Punjab National Bank with their headquarters in Kolkata and Delhi respectively defies logic in the same way as that of merging Canara Bank and Syndicate Bank having strengths in the same regions. The unions feel these merger moves will only result in further destabilising the economy. The employees also claim a large number of branches are being closed due to these mergers. They cite that SBI and Bank of Baroda have closed 1,500 branches in all following mergers.
The Unions are observing black day on Saturday as mark of protest against this decision. Employees of all public and private sector banks wore black badges as a mark of protest to the government's decision.
Earlier on Friday, the FM held a media meet to make the merger announcements. According to these, Oriental Bank of Commerce (OBC) and United Bank of India (UBI) will be merged with their larger peer Punjab National Bank (PNB). The merged entity will become the second largest bank in the public sector after State Bank of India. The other merger announcements include Syndicate Bank with Canara Bank; Andhra Bank and Corporation Bank will be taken over by Union Bank of India and Indian Bank will merge with Allahabad Bank.
The government believes by bringing the overall number of banks operating in the public sector to 12 or may be even further down, their efficiencies will improve, their ability to lend will be enhanced and so on. The government is also of the belief that these banking reforms are essential for the economy to pick up pace.