BEFI calls for nationalisation of private banks

[sajiv]

ELURU: P. Venkatramaiah, Deputy general secretary of the State unit of the Bank Employees' Federation of India (BEFI), on Sunday called for nationalisation of all the private banks in the face of economic meltdown across the world. He was speaking at an annual conference of the Andhra Pradesh Cooperative Bank Employees' Association, an arm of the BEF here.

Nationalisation of private banks was imperative to ensure the safety of the investors' money deposited in private banks at the present juncture, he observed.

Diversion of deposits
Some corporate giants in the banking sector declared their banks sick after diversion of huge extents of deposits mobilised from the gullible public, he said. The government had ironically announced a revival package for the 'sick' private banks in stead of protecting the interests of the depositors who lost crores of their hard earned money in the process, he added.

Mr. Venkatramaiah asserted that the Indian economy survived the worst economic crisis which impacted the entire world because of the public sector banking. Had the privatisation process been allowed into the banking sector, the country's economy would have been in a shambles, he added. Saying that the Indian political leadership was not drawing a lesson from the economic disaster, Mr. Venkatramaiah recalled that the UPA government had piloted a bill in Parliament recently, allowing an increase in the foreign direct investment in the banking sector from 26 per cent to 40 per cent. He apprehended that the move would spell a disaster for the public sector banking and the interests of crores of depositors.

IT waiver sought
K. Mohan Raju, general secretary of the association, appealed to the Central government to waive income tax on the incomes generated by cooperative banks.

The association leader highlighted the need for expansion of cooperative bank branches in rural areas to bring more number of rural folks, particularly farmers, still uncovered by the institutional credit under the bank fold.

Speaking of the urban-rural divide on the banking sector, he said there were 69,000 branches of various banks serving in urban areas across the country as against only 3,000 branches in rural areas which constituted 70 per cent of the country's population.