Govt going ahead with merger of nationalised banks despite opposition from industry: CPI(M)

The CPI(M) on Tuesday said the government was going ahead with the merger process of three nationalised banks in haste, ignoring opposition from the entire industry.

The Communist Party of India (Marxist) politburo, in a statement, said it was concerned over the "haste" in which it was being done.

"The politburo is deeply concerned at the unseemly haste with which the government of India has been going ahead with the merger/amalgamation process of three nationalised banks viz. the Vijaya Bank, the Bank of Baroda and the Dena Bank, ignoring the collective opposition of the employees and officers of the entire industry," it said.

The Left party claimed that while the merger of these banks was being justified by the government on the ground of strengthening and consolidating them, in reality, they will further be weakened.

"The problems of public sector banks emanate from the deliberate default in loan-repayment by big corporate houses. The solution lies in stern action by the government for outright recovery of the huge loan amounts from these defaulter corporates with penalty, instead of the futile exercise of merger," it said.

Alleging that the government was displaying a "totally indulgent attitude" towards the defaulting corporates, the CPI(M) said through the Insolvency and Bankruptcy Code (IBC) procedure, public sector banks were being forced to accept a big reduction in the defaulted loan amount.