Public Sector Bank Employees' Strike: Ex-RBI Governor Raghuram Rajan Casts Doubt on Bank Privatization

Strategic Insights -

Public sector bank employees in India went on a two-day strike on Monday and Tuesday, protesting against the privatization of state-run lenders. The strike, given by the United Forum of Bank Unions (UFBU), may have disrupted bank services, including deposits and withdrawals at branches, cheque clearances, and loan approvals. Former RBI governor Raghuram Rajan has expressed his doubts about the privatization of public sector banks, calling it a "colossal mistake" to sell the banks to industrial houses or foreign banks.

Key Takeaways:

  • The strike, given by UFBU, involved about 10 lakh bank employees and officers from various public sector banks.
  • The strike aimed to protest against the proposed privatization of two state-owned lenders.
  • Ex-RBI governor Raghuram Rajan cast doubt on the privatization of public sector banks, calling it a "colossal mistake".
  • The government has budgeted Rs 1.75 lakh crore from stake sales in public sector companies and financial institutions, including 2 public sector banks and one general insurance company for the next fiscal beginning April 1.
  • The government has not provided much detail on how the privatization of two banks will be done.
  • The former RBI chief suggested that perhaps one of India's private banks may be in a position to acquire a public sector bank, but is unsure if they have the appetite for it.

Statistics:

  • 10 lakh: The estimated number of bank employees and officers from various public sector banks who participated in the strike.
  • Rs 1.75 lakh crore: The budgeted amount from stake sales in public sector companies and financial institutions, including 2 public sector banks and one general insurance company for the next fiscal beginning April 1.

Sources:

  • PTI Interviews with Raghuram Rajan
  • Budget 2021-22
  • Times of India (for reprint rights)
  • UFBU (United Forum of Bank Unions) statement