UFBU strike against financial sector reforms unjustified: Govt

Government today said the strike announced by the United Forum of Bank Unions (UFBU) against the proposed financial sector reforms is "uncalled for and unjustified" and it will cause great inconvenience to people, driving customers to private sector banks.     

The UFBU had threatened last month to go on a two-day strike on September 24-25 to protest against the merger among the public sector banks, their privatisation and regarding the amendment in Banking Regulation Act.     

Referring to the privatisation of public sector banks (PSBs), the Finance Ministry said it will not lead to transfer of control and management of these banks to the private sector. The government will hold 51 per cent of equity in the PSBs and the features of public sector will be preserved.     

The ministry, in a statement also added that the initiatives for merger of PSBs have to come from the management of the banks themselves and "no specific directions in this connection have been issued by the government or the RBI. It has been only emphasised that the process of consolidation is necessary to improve the state of competitiveness of Indian banks globally".      

It said that at present government has no proposals before it from banks for merger.      
Regarding the issue of amending the Banking regulation act, removing the ceiling on voting rights in PSBs by foreign entities, the government said the amendment is necessary in order to give shareholders of private sector banks voting rights commensurate with the equity held by them.