Finance Minister Nirmala Sitharaman recently announced the merger of several state-run banks into other state-owned banks. On which now West Bengal Chief Minister Mamata Banerjee has raised questions. Mamta has also written a letter to Prime Minister Narendra Modi about this.
West Bengal CM Mamta Banerjee wrote a letter to PM Modi on Friday opposing the steps taken by the central government for the merger of public sector banks. Banerjee alleged that the unilateral decision of the central government by merging two public sector banks headquartered in Kolkata would adversely affect the pace of development of the state.
Citing Kolkata's rich history in the banking sector, Banerjee reminded that Allahabad Bank was formed in 1865, while United Bank of India was formed in 1914.
Expressing deep concern over this move of the government, Banerjee wrote in her letter, 'It seems that this step was mainly done through the central government to reduce the capital burden in public sector banks'. He wrote, 'Our experience about the previous merger of State Bank of India and related banks shows that the bad credit problem has actually worsened, resulting in decreasing profit and increasing debt.'
Banerjee claimed that a large part of rural Bengal is still out of banking and hence such a major decision will create a crisis for the state's economy. Especially the MSME sector and Self Help Groups (SHGs) will be affected.
Expressing apprehension about the fate of more than ten thousand employees of UBI and Allahabad Bank, Banerjee wrote that she fears many of them will be forced to take VRS.
Banks to Merge
Oriental Bank of Commerce (OBC) and United Bank will merge with Punjab National Bank (PNB). Union Bank of India, Andhra Bank and Corporation Bank will merge. At the same time, Indian Bank and Allahabad Bank will merge. Apart from this, the Syndicate Bank will merge with Canara Bank.
