In any country, the banking sector plays a vital role in shaping up the economy. Especially in poor, underdeveloped and developing countries, banks have a crucial role to play. Our country is no exception. Before independence, all our banks were in private hands, some of them in foreign hands and some of them owned by Indian private people. When India became free in 1947, it was highly backward because of the exploitation of our economy for nearly two hundred years by the British. Thus, these problems were staring at our country. When in the 1950s, India decided to move forward through economic development, the task was huge and involved huge resources. After independence, the government was compelled to convert the Imperial Bank of India into the State Bank of India in 1955 to open rural branches and help the people. But this one bank alone could not address the problem. Hence arose the demand that all the private banks should be nationalised. AIBEA spearheaded this struggle. In this background, due to the then prevailing favourable political scenario, in 1969, major private banks were nationalised in India. In the last 53 years, these nationalised banks have immensely contributed to the economic development of our country.
Nevertheless, before nationalisation and even after 1969, many private banks collapsed due to mismanagement and people lost their savings. Nationalised banks are protecting the savings of the people. Currently, there are more than one lakh bank branches as against 8000 in 1969. During this period, the total deposits have gone up from INR 5,000 crore to INR 180 lakh crore and total loans and advances from INR 3500 crore to INR 135 lakh crore. But, in 1990, the government decided to open our economy for privatisation, liberalization and globalization. Banks also became the target. To begin with, the government amended the policy by permitting the entry of private capital up to 49 per cent. Then, they have been trying to fully privatise our banks. But now the government has announced that nationalised banks will be privatised, thus, jeopardizing rural banking. Private banks will not encourage rural banking. They will be interested in more profits only. Slowly only rich people will be encouraged to have accounts. If banks are sold out, only very rich people can buy the banks and they will become the owners of the banks. Hence AIBEA is opposing the decision to privatise the banks.
For the past six years, bad loan accounts have been referred to tribunals under the Insolvency and Bankruptcy Code (IBC). Instead of loan recovery, these loans are being sold to some other companies for a cheap rate and banks have made huge losses. IBC has become a method to loot public money because banks incur huge haircuts and sacrifices in these deals. Defaulters escape without any penal action on them. Another corporate company is taking over these loans at cheap rates. AIBEA is a glorious organisation which fought for the nationalisation of banks in the larger interest of the country. That is why it is a reputed trade union in the country. Today, the challenge is the privatisation of banks and handing over huge money and precious savings of the people to greedy private corporate hands.
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