Finance Minister Nirmala Sitharaman's arguments on making banks private

Posted on 17th Mar 2021 by rohit kumar

After the announcement of the privatization of the two banks in the general budget, the two-day strike of the public sector banks has ended, but political debates also broke out on this.

 

It started on Tuesday after Congress leader Rahul Gandhi's tweet.

 

The Congress leader had supported the bank employees who were going on strike by tweeting. He wrote in the tweet that 'Government of India is privatizing profit and nationalizing loss'.

 

Rahul Gandhi wrote, "Selling 'ModiCronies' to public sector banks is to play with India's financial security. I stand in solidarity with the bank employees who are on strike."

 

Finance Minister replied

 

Finance Minister Nirmala Sitharaman responded to this during a media briefing on Tuesday, saying that Rahul Gandhi does not behave like the leader of the opposition party.

 

He said that the UPA government had 'nationalized corruption' and 'privatized taxpayers' money' for the good of a family.

 

Nirmala Sitharaman said, "Why are they suddenly thinking of profit and loss? For decades their government tried to privatize taxpayer money. You know-how. UPA government is paying taxpayers money for the good of a family." Continued to privatize. "

 

He said, "His grandmother nationalized the banks but the losses in the banks were nationalized during the UPA time."

 

What did banks say about privatization?

 

Finance Minister Nirmala Sitharaman said on the proposed process of privatization of two banks that not all banks will be privatized and whenever this happens, the interests of employees will be protected.

 

On Monday and Tuesday, state-owned banks went on strike in which more than 10 lakh employees participated.

 

Nirmala Sitharaman said that 'the decision of privatization has been taken very carefully and we want more equity in banks. We want to make banks fulfilling the aspirations of the country.

 

He said, "The interests of every staff member of the banks that are privatized will be protected. The interests of the existing employees will be protected at all costs."

 

"The policy of public sector enterprises states very clearly that we will be with the public sector banks. We will protect the interests of the employees completely."

 

"We had announced the Public Enterprises Policy, in which we have identified four areas where the government will be present. In some places, the presence of the government will be less but there will also be financial institutions."

 

Says Nirmala, "This means that the public sector undertakings will remain in the financial sector as well. Not everyone is going to be privatized."

 

What do economists say about the privatization of banks?

Raghuram Rajan, former governor of the country's central bank RBI, expressed doubts over the successful privatization of ineffective public banks in an interview to news agency PTI.

 

At the same time, he has said that even if these are sold to corporate houses, then it would be a 'very big mistake'.

 

Recently, in the town hall program of news channel NDTV, Raghuram Rajan had described the privatization of banks as a mistake.

 

What can be the process of privatizing banks? In response to this question, Rajan said that at this time there is a need to fix the operating system of public sector banks.

 

He said, "Bring more professional people, give the board the open authority to appoint and remove the CEO and then take away the control of the government. In this way, this government corporation, working in the public interest, will be with the public and not the government." Near. "

 

On the privatization of banks, former Deputy Governor of RBI SS Mundra told the news channel CNBC-TV18 that the solution to every disease is privatization, it should also not be taken for granted.

 

He said, "We have seen many examples and I believe that no one is yet able to conclude that this is the only way." Mundra says that there are many examples where work is separated from ownership.

 

"It can be a good model. There are two issues here, one is freedom of work and the other is capital. If there are opportunities for growth and capital increases, then there will be a lot of limitations because different areas will also claim it. "

 

"If it is done in several stages, then it will be helpful because you will have the assurance of ownership and the freedom to raise capital."