Opposing the government's plan to reduce its stake to 52 per cent in PSU banks, All India Bank Officers' Confederation today said such steps would ultimately benefit private players.
Harvinder Singh, General Secretary of the Confederation, said reduction in the government share in the profit-making public sector banks would also lead to sharp rise in non-performing assets.
"Privatisation of profit and nationalisation of losses appears to be the policy of the government which is neglecting our pending demands. It is also considering reducing stakes in profit making state run banks that will be not a good decision," Singh, who was here for annual general body meeting, told reporters.
"Government should arrange capital for the banks instead of reducing it," he said.
Minister of State for Finance Jayant Sinha yesterday told the Lok Sabha that government is "considering" to bring down its equity in the state-owned banks as it would reduce budgetary requirement for capitalisation of PSU banks.
"The step would substantially reduce the requirement of budgetary provision for infusion of capital in public sector banks," he had said in a written reply.
Sinha further said "the reduction of government share in equity capital of PSBs to 52 per cent will enable mobilisation of Rs 89,120 crore approx on the basis of current market price on November 21".
There are about two dozen PSU banks and government holding in them is between 56.26 per cent to 88.63 per cent.
The government has infused an amount of Rs 58,600 crore since 2011 in these PSBs.
Meanwhile, Singh rued that despite relentless efforts, neither the banking regulator nor the government was seriously considering demands of bank officers and employees with regard to the service issues including salary.
"There has been an undue delay in our wage negotiations process that is pending for more than two years. A government officer gets high wages than a bank officer," he said.
Bank officers and employees would hold relay strikes from December 2 to 5, he added.
