A Canadian investment firm’s takeover of the CSB (Catholic Syrian Bank) Bank has irked the Kerala government, which has openly expressed its displeasure against the “anti-people and pro-corporate policies” of the state’s oldest scheduled bank.
State Finance Minister K N Balagopal expressed his concern while addressing the Assembly on Wednesday (October 13). In response to a calling attention motion moved by Communist Party of India (Marxist) legislator P Nandakumar, Balagopal said, “There is only so much Kerala Government could do. But the state would raise the people’s concerns with the Central Government and the RBI. The government will also initiate talks with the CSB’s management and raise the concerns aired by depositors, the general public, and bank staff.”
The CSB Bank has over 400 branches and with more than 15 lakh customers. The bank has Rs 30,000 crore in deposits.
The state finance minister said the bank’s policies are anti-people and pro-corporate. He blamed the Fairfax Group, led by Canadian-billionaire Prem Watsa, for not showing any commitment towards the state where the bank has its base. Balagopal told the House that the bank has now stopped giving loans for small-scale businesses, housing and education purposes fearing default in repayment.
“On the contrary, the bank is using the hard-earned money of small depositors to finance corporate ventures. The bank is also insisting on small depositors to maintain a minimum of ₹30,000 in their accounts, which is against the principle of small saving,” said the finance minister.
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After the Union government allowed up to 74% foreign investment in private scheduled banks, the CSB Bank (formerly Catholic Syrian Bank) initially struggled to raise money, but could not for lack of potential investors. In 2017 too, the bank tried, but failed to raise money from all kinds of investors, including private equity. It got listed in December 2019. A year later, its market cap is more than the combined valuation of its southern private banking peers.
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In the last week of September, employees of the bank decided to go on a three-day strike, protesting against anti-labour policies and demanding wage revision. The bank management then told the unions that it would implement the wage agreement concluded between Indian Banks’ Association (IBA) and the unions, but it did not give its consent to IBA to negotiate with unions on its behalf.