The Bank of Maharashtra, the central bank of India, the Indian overseas bank, and the bank of India are the four banks that have been shortlisted by the government for the privatization drive. All the four banks have huge employee strength and their job permanency goes shaking after the decision. The sale of two banks will start during FY 21-22 which means at the beginning of April 2021.
Massive employee strength; workers go on strike
All the four banks that are chosen for privatization have huge employee strength all over the county. While the bank of India has an employee strength of almost 50,00, the bank of Maharashtra counts for the lowest in the list with nearly 13,000 employees. The central bank of India and the Indian overseas bank has 33,000 and 26,000 workforces approximately. On Monday, the employees of the banks went on a 2-day strike opposing the decision by the government. Though the PM announced this decision and the expected time for the sale to go on floors is the starting of the fiscal year 21-22, the govt officials fear that resistance from employee unions of these banks can come in between the implementation of this decision.
Certain factors can also change the decision at the last moment
Government sources said that being small and mid-sized banks, these four cannot have many takers for the sale. And if certain factors do not work out in favor of the decision then it can be changed at the last moment. Regarding this decision, the source said, “Factors like a number of employees, the pressure of the trade unions and political repercussions would impact a final decision”. On the other hand, the government hopes that there will be a good turnout of takers during the sale that goes on the floor during FY 21-22 for two banks from the list.
What economists are saying about the decision?
Major economists of the country are saying that these banks have bad assets and are weak in comparison to other banks. And thus, ditching the decision to sell them would profit the government. “The government should consider what gives it better pricing without compromising its long-term goal of financing the growing Indian economy”, said Devendra Pant, chief economist of the country. Despite such warnings, the PM is still stiff at his decision. Hopefully, this move can benefit the government in all aspects.
TPT Policy Advocacy & Recommendations
- The sale of these small and mid-sized banks does not seem to be a very profitable idea for the government. Thus, the Govt must re-consider the decision again!
- Instead of selling these small-sized banks, the Govt must sell the large-sized ones that would help them draw more revenues from them.