Monsoon session: Cong to oppose any move to bring down govt stake in 12 PSBs, says Jairam Ramesh

Jairam Ramesh, Congress general secretary in-charge communications, on Friday gave a big hint on the party's agenda in the upcoming Monsoon session. He said both inside and outside the Parliament, the Congress will oppose moves to reduce the government's stake in public sector banks below 51 per cent.

"Any move to dilute that position in the 12 public sector banks that function presently would continue to be resisted forcefully both in Parliament and outside," he said. 

Ramesh added the mergers in public sector banking were broadly accepted in the last 7 years only because the Centre's share was not supposed to be less than 51 per cent.

The government is likely to bring amendments to the Banking Regulation Act 1949 and other laws such as Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 in the budget session due to which the government's shareholding in PSBs can go down below 51 per cent, newswire PTI reported citing sources.  

If passed, these amendments would help in reducing government holding in state-owned banks, improving bank governance and enhancing investors' protection, sources said.

He said that these mergers come with their own challenges. "Big is not always Better. But they were broadly accepted only because the Union Government's share in public sector banks was not to be reduced to below 51 per cent," Ramesh mentioned. 

Some mergers that Ramesh quoted included Syndicate Bank-Canara Bank merger, Allahabad Bank-Indian Bank merger, as well as SBI's acquisition of State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Hyderabad and Bharatiya Mahila Bank. 

Citing the history of nationalisation of banks under late PM Indira Gandhi, Ramesh said that public sector banks have served the country in times of global financial crisis. They also have an impressive pool of expertise, Ramesh added. 

He further said that political parties like the erstwhile Bharatiya Jana Sangh opposed the bank nationalisation that took place in 1969. He, however, added that within 5 months, the Jana Sangh publicly demanded the nationalisation of foreign banks as well.