From April 1, 2020, ten Indian banks have merged, and four banks have been created. It has been the largest merge in India’s banking space when the government declared to make a decision on merging in August 2019.
The wave of protests about the decision
The decision was not met with great approval at the beginning of workers. On August 31, 2019, about 300 thousand employees of state-owned banks participated in a strike in India against government plans to reorganize the banking system.
According to the workers present on strike, the reason for dissatisfaction was the government’s plans to merge 10 state-owned banks into four, which gave rise to fears of mass cuts among bank employees. And we know that in India a lot of people live in poverty and losing a job is always tough for a citizen. The implementation of such a reform in August 2019 was announced by the Minister of Finance of India Nirmala Sitharaman.
The representative of the bank employees union in India was strongly dissatisfied with the decision. He said that the government might call this a merger, but in reality, it would end with the closure of six banks.
India is also famous for being a country where Forex is trading is gradually emerging. Lots of employees take it as a part-time job with eurusd pair being the most popular in the state. The unemployment will significantly weaken the customers involved in the trading sector – and we know that people make a fortune from Forex.
Across India, the banking workers who took part in the strike did not go to work and joined the protest marches. Due to the action, banks suspended the provision of a number of services, such as cash disbursements and check transactions; ATMs operate intermittently.
State-owned banks account for two-thirds of the assets of the entire banking sector in India and the majority of bad loans. In 2017, Indian Prime Minister Narendra Modi promised to reduce the number of state-owned banks from 27 to 12 in order to ensure the financial stability of banking institutions.
The decision still comes into the effect
On April 1 ten PSU banks still managed to amalgamate. Initially, the Indian state financial company Indian Bank and one of the country’s oldest joint-stock banks, Allahabad Bank, planned a merger. A government spokesman told the public that the merger was planned to be completed by the end of the current fiscal year, that is, before March 31, 2020. He said that In the next few months, bank councils should complete all formal procedures.
Earlier, the government had already announced the consolidation of 10 public sector banks into four large financial institutions.
According to the Indian news agency Jagran, Indian Bank currently has a large presence in the southern regions of the country, while Allahabad Bank branches are located mainly in the north and east.
The combined bank will be the seventh-largest financial institution in the country. The banks noted in a statement that after the merger, their main priority, in addition to the growth and profitability of the business, would be personnel management and ensuring the well-being of employees.
Other merges that need to be mentioned are: OBC and United Bank of India will be merged into Punjab National Bank; Syndicate Bank will be merged into Canara Bank; Union Bank of India will be merged with Andhra Bank and Corporation Bank.