The UFBU is an umbrella body of several bank unions.

 

He said the strike is against central government's move to privatise public sector banks (PSB) and to introduce the Banking Laws (Amendment) Bill, 2021 in the current session of Parliament.

 

The passage of the Bill will enable the Government to reduce their equity capital in the PSBs to less than 51 per cent and allow private hands to take over them.

 

The government had earlier said it would privatise two of its banks.

 

According to him, about 10 lakh bankers in public and private sector banks are participating in the strike.

 

Owing to the stir, operations at the cheque clearing grids in Mumbai, Chennai and Delhi will be impacted and several thousands of crore worth of cheques would not be cleared.

 

Venkatachalam said that at the conciliation meeting held in Delhi on Wednesday, where representatives of Indian Banks' Association (IBA) and the Finance Ministry were also present, the unions reiterated that they would defer the strike if the Central government assures them that it would defer the introduction of Banking Laws (Amendment) Bill 2021 in Parliament.

 

According to him, the only issue being confronted with the PSBs was that of huge Non-Performing Assets (NPAs) in which the major share was that of big corporates.

 

"Successive governments have taken initiatives such as Debt Recovery Tribunals, SARFAESI Act, IBC, etc, but they have not yielded the desired results and therefore ultimately banks were forced to write off those loans resulting into huge losses," he said.

 

This shows that it is not the nationalisation of banks, which has failed but it is the wilful default of the corporate and big business houses, which have dragged the banks into this crisis, Venkatachalam added.

 

"Even under the Insolvency and Bankruptcy Code, while bad loans have been resolved and banks could get back some portion of the loan, it has been with huge haircuts for the banks," he said.