Govt committed to protecting interest of staff in PSBs that may be privatised, says FM

Nirmala Sitharaman said interest of all employees of state-owned banks which are likely to be privatised will be protected, even as bank unions observed a two-day strike against privatisation

Union Finance Minister Nirmala Sitharaman (Photo Courtesy: PTI)
Union Finance Minister Nirmala Sitharaman (Photo Courtesy: PTI)


Finance Minister Nirmala Sitharaman on Tuesday said the interest of all employees of state-owned banks which are likely to be privatised will be protected, even as bank unions observed a two-day strike against the government's privatisation decision.

Replying to a query during a press conference, she clarified that public sector presence will continue in the banking space.

"...we have announced public enterprise policy based on which we have identified those four areas in which we said government presence, public sector presence will be there, and bare minimum presence is what we have said, in that financial institutions are also there.

"Meaning, even in financial sector we will still have the presence of public sector enterprise...not all of them are going to be privatised," she said.

Even for those which are likely to be privatised, Sitharaman said the government will ensure that "these privatised institution will also continue to function. After the privatisation, we will also have to ensure that the staff or the personnel who are there, their every interest will be protected."

In her Budget Speech on February 1, Sitharaman had announced that the government proposes to take up the privatisation of two public sector banks (PSBs) and one general insurance company in the year 2021-22.

This would require legislative amendments and she had proposed to introduce the amendments in the ongoin Budget session of Parliament itself.

Nine bank unions are observing a two-day strike opposing the government's policy to privatise lenders. Tuesday was the last day of their strike.

At the press conference, the minister referred to amalgamation of PSBs and said the country needs many more lenders of the size of State Bank of India (SBI).

She further said the government wants financial institutions to get more liquidity and more people to put money into them to make the entities sustainable.

The government wants the staff of these financial institutions to be able to perform their duties, in which they have acquired skill over the decades, and run the banks, the minister added.

"So, to immediately quickly conclude saying 'oh every bank is going to be sold off' is not right.

"And even whether it is bank or any other privatisation, I want to take this opportunity to tell...that the interest of the workers, interest of those who have put in services over the decades will absolutely be protected. Whether it is their salaries, whether it is their scale, whether it is the pension, it will all be taken care of," she said.

The government has merged 14 public sector banks in the last four years.

The four strategic sectors in which the government will continue to have its presence, though bare minimum, are -- atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; and banking, insurance and financial services.

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