Hyderabad, Aug 27 (PTI) The consolidation in the banking sector would hurt the social obligations of state-owned lenders, CPI General Secretary S Sudhakar Reddy said. Also Read - Pakistan PM Imran Khan To Take Vote of Confidence From The Assembly after Facing Defeat in Senate Elections
CPI is “totally opposed” to mergers and amalgamations in the banking system and it supports the agitation by bank employees who plan to intensify their protests in the coming months, Reddy told PTI here. Also Read - D Raja Replaces Sudhakar Reddy as CPI General Secretary
“As banks grow in size by mergers and amalgamations, their social responsibility would decrease. They will give more loans to corporate companies to reduce burden. Also Read - Budget session of Mizoram Assembly from March 12
“That is, they may feel that it is better to lend to a corporate company instead of having 10,000 accounts… It is these corporate companies who are hurting (banks),” he claimed.
The loans distributed to farmers, self-employed and others as a social responsibility would decline in the wake of mergers and the sense of belongingness towards regional banks would cease to exist, he said.
The CPI leader claimed that loans of corporates to the tune of Rs 2.56 lakh crore have been waived off “in the last few years”.
The bad loans waived off are less for the poor in comparison to the corporates, he alleged.
CPI had supported the recent strike by bank staff and it will support them in the agitation proposed to be held in October, Reddy said.
The volume of bad loans and other losses is shown to be small in the profit statements of banks, he claimed.
The recovery process discriminates against ordinary people, Reddy alleged.
In case of ordinary citizens, banks auction not only the property of the loanee but also the property of the person who provided collateral security, but if a private company defaults, action is taken only against the firm and its associates are not touched, he claimed.
This is published unedited from the PTI feed.