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Minister of State for Finance and Corporate Affairs Anurag Singh Thakur speaks in the Lok Sabha during the Winter Session of Parliament in New Delhi. Photo: PTI

No job losses post merger of 10 PSBs: Govt

The government on Tuesday (December 3) assured the Rajya Sabha that merger of 10 public sector banks will not lead to any job losses and employees’ interest will be protected.

During the Question Hour, Minister of State for Finance, Anurag Singh Thakur said that lending and other banking services to eastern states would improve after Kolkata-based United Bank of India (UBI) will be merged with Punjab National Bank and Allahabad Bank will be amalgamated with Indian Bank.

“Merger of banks will strengthen the lending capacity. It has been ensured that no person loses job. The employees of merging banks will benefit the maximum and merger is done keeping their interest in mind,” he said. He added that after due consideration by their respective boards, the banks have informed that multi-level coordination and integration committees have been set up to ensure faster integration across functionalities.

Also read: After govt announces mega merger of banks, employees declare protest

The minister was responding to a query from Trinamool Congress member Manish Gupta who said that about 50,000 employees will be jobless by next year due to the merger.
To another query on banking services likely to be affected in eastern states due to the merger, the minister said the reach and lending capacity will be “much larger and better” with the amalgamation.

“In today’s time of competition, I think expansion of these banks is very important…It was our government that went for asset quality review of bank loans given between 2004 and 2014. We adopted an approach for better functioning of the banks and recapitalised them with over ₹2.35 lakh crore for better strengthening and functioning,” he said.

When asked about the reasons for merger of UBI with PNB, the minister said, “I think the overall intention was to create a strong and competitive bank that may serve as catalyst of growth with improved risk profile of the bank. As far as the interest of employees are concerned, pay allowances were less favourable overall.”

Also read: Bank mergers will not cause any job loss, FM Sitharaman assures

He said UBI’s total business size is ₹2,08,000 crore, whereas that of PNB is ₹11,82,224 crore. With the merger, total business size will be ₹17,94,526 crore, making it the second largest bank in the country. In August, the government announced a mega plan to merge 10 public sector banks into four with a view to creating fewer and stronger global-sized lenders with robust balance sheets that can be used to boost credit and spur growth.

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