There will no job loss due to merger of banks: Finance Minister

Chennai: Finance Minister Nirmala Sitharaman allayed fears of job losses following the proposed merger of public sector banks, saying not even one employee shall be removed following the amalgamation.

“Absolutely, ill informed. I want to assure every union in every one of these banks to please recall what I have said last Friday. When we spoke about amalgamation of banks I have very clearly underlined the fact that there shall not be one employee removed. Not at all,” she told reporters here Sunday.

She was replying to a question on the bank employees unions opposing the merger plan on the ground it would lead to loss of jobs.

The Finance Minister on Friday unveiled a mega plan to merge 10 public sector banks into four as part of plans to create fewer and stronger global-sized lenders as the government looked to boost economic growth from a five-year low.
Nirmala Sitharaman, who was here to address officers of Customs, Goods and Service Tax and Income Tax department, said there would not be any closure of banks and no bank was being asked to do something new.

“More capital is being given to banks and they will continue to do more of what they were doing earlier,” she said.

On 23 August, the Finance Minister had announced a raft of measures to boost the economy, including capital infusion of Rs 70,000 crore into public sector banks.

She had also unveiled a mega plan on Friday to merge 10 public sector banks into four to create fewer and stronger global-sized lenders The All India Bank Employees’ Union had alleged that Indian Bank may face closure following its merger with Allahabad Bank.

To a question on this, Nirmala Sitharaman said Indian Bank would be the anchor bank after the merger.

She said when a bank receives capital, it is for them to function more of what they were expected to do as core business, which was to attract business and lend. “Second, another bank in this region is Indian Overseas Bank which continues without any amalgamation added to it. It is also something you should keep in mind,” she said.

Asked whether there was any slowdown in the economy, she said the government was responding to it sectorally, based on their requirement.

“Every sector of the Indian economy, when it approaches us, we hear them out for solutions that they want and we respond to it. Suggestions (from them) and what would they want and what they expect from the government of India and I respond to them. I have already done (it) twice and I will do so more number of times. Every industry which has approached me I will respond,” she said.

Citing an example, she said the automobile sector was in a transition phase to produce engines and components meeting BS-VI fuel norms (from the earlier BS-IV), which comes into effect from 1 April, 2020.

The Minister said it was not the union government’s decision, but a Supreme Court order two years ago that automobile companies shall not produce any BS-IV vehicle after 31 March 2020, be it scooters or any other vehicle.

To a query about the automobile industry seeking a Goods and Service Tax rate cut, she said it should be decided by the GST Council.

Asked what was her message to people who had lost their jobs and those fearing job losses, Nirmala Sitharaman said, ‘I can only say we are responding to the industry requirements. Across the board there is no one particular answer that I can give, saying this is the magic wand. Sectorally, what they want, we are responding,’ she said.

The Finance Minister said the government understands that the
contours and tone of issues for each sector varied from one to the other.

“The automobile (sector) has an issue, agriculture has a different issue. So each sector has a sectorial requirement which we want to respond,” she said.