Staff oppose move to hand over Nainital Bank to corporate sector
The bank has 135 branches operating in five states — Uttarakhand, Uttar Pradesh, Delhi, Haryana and Rajasthan.dehradun Updated: Apr 19, 2018 22:06 IST
Nainital Bank, which is a scheduled commercial bank in Uttarakhand and a subsidiary of the Bank of Baroda, may be privatised, fears its employees. The management has, however, said that though Bank of Baroda may reduce its stake in the bank, it will remain in the same form and will not be privatised.
The 96-year-old bank was set up by dignitaries such as Pandit Govind Ballabh Pant and others. The bank has 135 branches operating in five states — Uttarakhand, Uttar Pradesh, Delhi, Haryana and Rajasthan. It became a subsidiary of the Bank of Baroda in 1973, which now has a 98.5% stake in the bank.
Chandra Shekhar Kanyal, who is the president of the Nainital Bank Officers Union, alleged that efforts were on to hand over the bank to a corporate sector bank. “Some corporate sector companies failed in obtaining banking licence as their lending was not 40%. The government is now making a backdoor arrangement for these corporate sector banks to gain control of scheduled banks,” said Kanyal.
He said that there were around 870 employees of the bank and they favoured remaining as a scheduled bank and a subsidiary of the Bank of Baroda. “We will protest all moves of the Bank of Baroda in diluting its stake,” he said.
Bank of Baroda has joined its government-run rivals, including State Bank of India and Punjab National Bank, in efforts to raise funds by selling non-core assets as the world’s highest bad-loan ratio erodes profitability.
Mukesh Kumar, chairman of the bank, said that Bank of Baroda will be lessening its stake in the bank to promote digitisation. “The name of the bank will remain the same and it will become a digitally enabled bank,” he said. Kumar, however, refuted the charge that the bank will be sold to a private sector corporation or corporate sector bank.
“I assure you that no such talks are on at present and we are in fact moving towards an era of growth. We will be opening eight more branches and the Non Performing Assets are already down from 165 crores last year to 162 crores this year. The profit has also gone up, due to which the bank will not be sold to any private entity,” he said.
Nainital Bank reported 484 million rupees of net income in the year ended March 31.
(With inputs from agencies)
First Published: Apr 19, 2018 22:06 IST