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New Delhi, January 15: The Polit Bureau of Communist Party of India (Marxist) has issued the following statement:

The Polit Bureau is deeply concerned at the un-seemly haste with which the government of India has been going ahead with the merger/amalgamation process of three nationalized banks viz., Vijaya Bank, Bank of Baroda and Dena Bank ignoring the collective opposition of the employees and officers together of the entire industry.

The merger of banks is being justified by the Government on ground of strengthening and consolidating the concerned banks; but in reality, such a merger will further weaken all the three banks post merger. Problems of public sector banks emanate from the deliberate default in loan-repayment by the big corporate houses. The solution lies in stern action by the Government for outright recovery of the huge loan amounts from these defaulter corporates with penalty instead of the futile exercise on merger.

However, the Government has been displaying a totally indulgent attitude to the defaulter corporates and through the Insolvency and Bankruptcy Code (IBC) procedure public sector banks are being forced to accept big reduction of the defaulted loan amount.

Such merger of banks, instead of addressing their basic problems, will actually result in squeezing the banks’ operational areas through inevitable closure of several branches seriously affecting employment. It also affects the spread and availability of banking services for common people particularly in comparatively remote areas.

The CPI(M) opposes the harmful exercise of merger of banks and calls upon the government to desist from such moves.