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    State Banks' Staff Union: Ufbu Condemns Nayak Panel Report - Demands Rejection of Report

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    Prabhakaran Rajenthiran
    The document is a circular from the United Forum of Bank Unions condemning the recommendations of the P.J. Nayak Committee, which reviewed governance of banks in India. The UFBU believes the recommendations are detrimental to public interest and demand rejecting the report. Specifically, the report fails to consider benefits of nationalizing banks, proposes privatizing all public sector banks, and reducing government control - undermining goals of providing access to banking in rural areas and priority sectors. The UFBU argues the nationalized bank model has helped economic growth and wants the government to support financial inclusion instead of privatizing public sector banks.

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    State Banks' Staff Union: Ufbu Condemns Nayak Panel Report - Demands Rejection of Report

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    Prabhakaran Rajenthiran
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    The document is a circular from the United Forum of Bank Unions condemning the recommendations of the P.J. Nayak Committee, which reviewed governance of banks in India. The UFBU believes the recommendations are detrimental to public interest and demand rejecting the report. Specifically, the report fails to consider benefits of nationalizing banks, proposes privatizing all public sector banks, and reducing government control - undermining goals of providing access to banking in rural areas and priority sectors. The UFBU argues the nationalized bank model has helped economic growth and wants the government to support financial inclusion instead of privatizing public sector banks.

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    32 Circular No.43

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    The document is a circular from the United Forum of Bank Unions condemning the recommendations of the P.J. Nayak Committee, which reviewed governance of banks in India. The UFBU believes the recommendations are detrimental to public interest and demand rejecting the report. Specifically, the report fails to consider benefits of nationalizing banks, proposes privatizing all public sector banks, and reducing government control - undermining goals of providing access to banking in rural areas and priority sectors. The UFBU argues the nationalized bank model has helped economic growth and wants the government to support financial inclusion instead of privatizing public sector banks.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
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    23 views2 pages

    State Banks' Staff Union: Ufbu Condemns Nayak Panel Report - Demands Rejection of Report

    Uploaded by

    Prabhakaran Rajenthiran
    The document is a circular from the United Forum of Bank Unions condemning the recommendations of the P.J. Nayak Committee, which reviewed governance of banks in India. The UFBU believes the recommendations are detrimental to public interest and demand rejecting the report. Specifically, the report fails to consider benefits of nationalizing banks, proposes privatizing all public sector banks, and reducing government control - undermining goals of providing access to banking in rural areas and priority sectors. The UFBU argues the nationalized bank model has helped economic growth and wants the government to support financial inclusion instead of privatizing public sector banks.

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    of 2

    Telegrams: GUARDIAN Fax: 091-044 - 2524 35 24

    Telephone: 2522 07 31
    2522 71 79

    State Banks Staff Union


    (CHENNAI CIRCLE)
    (Regd. No: 883)
    (Affiliated to All India State Bank of India Staff Federation)

    POST BOX NO.1754


    STATE BANK BUILDINGS
    84, RAJAJI SALAI
    CHENNAI 600 001.

    CIRCULAR NO.43 29TH MAY 2014


    UFBU CONDEMNS NAYAK PANEL REPORT -
    DEMANDS REJECTION OF REPORT

    We reproduce hereunder the text of the Circular No.88 dated 28.05.2014 issued by
    Com. M.V.Murali, General Secretary of our National Organisation, NCBE appending the
    Circular No.UFBU/2014/23 dated 28.05.2014, the contents of which are self-explanatory.

    (C.M.BASKARAN)
    GENERAL SECRETARY
    -------------------------------------------------------------------------------------------------------------------------------------
    TEXT OF THE UFBU CIRCULAR NO.UFBU/2014/23 DATED 28TH MAY 2014:
    We, the United Forum of Bank Unions (UFBU), the umbrella forum of all workmen unions and
    officers associations in the industry, representing 10 lac bank employees and officers, are shocked
    to observe the retrograde recommendations of the P J Nayak Committee, which was appointed by
    RBI to Review Governance of Boards of Banks in India.

    We strongly condemn the retrograde recommendations of the Nayak Panel as they are detrimental
    to the interests of general public and the nation on the whole and demand for unequivocal rejection
    of the said Report for the reasons as under:

    The report contains only one-sided analysis as majority of the members on the Nayak
    Committee belongs to private bank/organisations and due representation to Public
    Sector bodies is not given;

    A deliberate attempt against public sector system is visible as no cognizance is given


    to the benefits derived out of Nationalisation of Banks towards the economic growth
    and the prosperity of the country since nationalization in 1969.

    02. It is a known fact that in the year 1969, a major decision was taken by the then Prime
    Minister, Late Smt. Indira Gandhi to nationalize major banks in order to expand bank credit to priority
    areas, which were neglected till then.

    03. The objectives of nationalization of commercial banks can be attributed mainly towards
    Social Welfare, Control of Private Monopolies, Expansion of Banking, Reduction of Regional
    Imbalances, Priority Sector Lending and for Development of banking habit. More particularly to
    ensure that the major financial resource of the Country mobilized through public savings/deposits is
    at the disposal of the Government but not in the hands of a few industrialists/Corporate houses.

    04. There is no denying fact that banks have done good work in socio-economic transformation
    and until 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth
    rate of the Indian economy. It is to be noted that the deposits in Public Sector Banks have
    increased due to increasing confidence of public that their funds are safe and secured.

    2
    ..Page 2..

    05. It will not be out of context to mention here that the UFBU is strongly opposed to the reform
    measures in the financial sector as it is detrimental to the interests of the Nation on the whole.

    06. It is quite unfortunate that the insulation provided to the economy of the Country by the
    regulatory system of Public Sector Banks during the economic recession in 2008 is completely
    forgotten and once again attempts are being made to privatise the Public Sector Banks.

    07. We strongly oppose the following retrograde recommendations, among others of P J Nayak
    Committee:

    a. The Committee insists on capital requirement quoting that the capital of public sector
    banks has significantly eroded with the proportion of stressed assets rising rapidly,
    without proper assessment of reasons and individuals/ organisations behind the
    increased stressed Assets/NPAs and consequential erosion in capital, and recommends
    that the public sector banks be brought under the control of those defaulters, who are
    responsible for erosion in capital of public sector banks;

    b. The Committee recommends for radical reform measures, which would bring back the
    pre-nationalisation concept of class-banking;

    c. The committee proposes that the Government shall distance itself from several bank
    governance functions which it presently discharges and recommends that the Bank
    Nationalisation Acts of 1970 and 1980 together with SBI Act and the SBI (Subsidiary
    Banks) Act be repealed, means privatizing all the Public Sector Banks, which will pave
    way for spread of the monopoly enterprise. Further, Banks collect savings from the
    general public and if it is in the hands of private sector, the national interests may be
    neglected. The nationalization of banks ensured the availability of resources to the
    priority sectors. Besides, nationalized banks command more confidence of the customers
    about the safety of their deposits.

    d. The committee opines that difficulties in public sector banks arise from several externally
    imposed constraints and suggests for reduction of Government stake to less than 50 per
    cent and raising the limit of investors voting rights to 26 per cent from the existing
    10 per cent to pave way for private control, neglecting the fact that India aims at socialism
    and this objective can only be achieved with the financial institutions under the control of
    Government and especially through nationalization. Rather, to control externally imposed
    constraints, there are ways and means to ensure more autonomy to Public Sector Banks
    not necessarily by reduction of the Government stake.

    08. The report of the P J Nayak Committee recommendations aimed at privatization of public
    sector banks, merger of banks, more flexible bank licensing policy, etc. which would benefit only the
    private players and in no way would be beneficial to the common general public and the Nation on
    the whole. The report of the Nayak Committee is biased, anti-public, anti-national and pro-
    imperialistic and hence we demand for outright rejection of the P J Nayak Committee Report on
    Review of Governance of Boards of Banks in India in toto and provide justice and support to the
    Government initiatives in Financial Inclusion by spreading the bank services to every nook and
    corner of the Country.

    We hope for your positive response in the matter.

    With best regards,

    Sd/-
    (M.V.MURALI)
    CONVENOR

    SBSU (CC) ::: AISBISF : : : NCBE ::: UFBU ZINDABAD

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