No job cuts says govt even as public banks merge | business | Hindustan Times
Today in New Delhi, India
Mar 31, 2017-Friday
New Delhi
  • Humidity
  • Wind

No job cuts says govt even as public banks merge

business Updated: May 05, 2016 11:34 IST
Mahua Venkatesh
Arun Jaitley

Finance Minister Arun Jaitley said in March that the need of the hour is to merge the 27 public banks to create few but strong institutions.(PTI)

The Narendra Modi government, which is keen to keen to consolidate public sector banks and bring down their numbers to about six, has assured that there will be no job losses in the process. The newly set up bank board bureau, which will chalk out the roadmap for consolidation, is set to touch upon this “tricky” issue, an official source said.

The tallest challenge for the government is to win the confidence of the eight lakh employees working in these lenders besides the unions to carry on with the consolidation process. Bank unions, fearing job cuts, have been the staunchest opponents of this merger process.

“We want to carry out the exercise in such a manner that no employee has to leave…the issue is delicate and tricky and the government will take all steps to ensure that it is done seamlessly,” a senior finance ministry official, who did not wish to be identified told Hindustan Times. “One of the fears is that there will be loss of jobs..we want to assure them that there will be no job loss…in fact we have to recruit large numbers,” the official added.

However, an option may be provided to the employees to move from one bank to another, according to the requirement.

The roadmap to consolidation is expected only in 2016-17. Issues such as technology, asset base, regional strength and cultural match would be critical in chalking out the consolidation strategies and identifying banks.

The finance ministry has already initiated talks with the banking unions on the issue of consolidation.

Finance minister Arun Jaitley on March 5 announced that consolidation in public sector banks was the way forward as they would to deal with intense competition. Jaitley said that the need was to create strong banks. At present there are 27 state owned banks.

While the previous UPA government had tried to initiate the process, it failed to get the support of the unions and eventually dumped the idea of consolidation.