Lok Sabha elections 2019: In Dakshina Kannada, BJP faces Bunt ire over Vijaya Bank’s merger
The government mandated a merger of the public sector Vijaya Bank and Dena Bank with Bank of Baroda on April 1, to create a more competitive financial institution.Updated: Apr 18, 2019 06:33 IST
In the village of Machina, about 50km from the city, a fresh coat of plaster on the board outside a Vijaya Bank branch announces that it will henceforth be called Bank of Baroda. Resident H Subbayya Shetty says it is hard to digest the fact that the bank he worked in for 34 years is losing its identity. Shetty began his career as a clerk and retired as the managing director of the bank’s housing finance department. He was also leader of Vijaya Bank employees’ union.
Over its 88-year history, the bank came to symbolise the pride of the Bunt community, starting from the pre-Independence days. In the 1970s, when the community’s lands were redistributed to tillers as part of land reforms, the bank helped the Bunts transition out of the agrarian economy.
The government mandated a merger of the public sector Vijaya Bank and Dena Bank with Bank of Baroda on April 1, to create a more competitive financial institution. It has now turned into an emotive community pride issue in coastal Karnataka — where five of India’s prominent banks were founded in the first half of the 20th century, a fact acknowledged by Prime Minister Narendra Modi at a recent rally here.
Protests were held in the region condemning the merger. The Congress is trying to cash in on the issue in Dakshina Kannada, a seat that has been the stronghold of the Bharatiya Janata Party since 1991 and which will go to the polls on Thursday, along with 13 other Lok Sabha constituencies in the state. Congress candidate, Mithun Rai, is a member of the Bunt community as is the sitting BJP MP Nalin Kumar Kateel.
Rai says the issue is important because the community feels a sense of loss. Kateel, in turn, argues that the merger was initiated by the previous United Progressive Alliance (UPA) government led by the Congress.
A major chunk of the community has supported the BJP over the past three decades, said Vijay Prasad Alva, secretary of the Federation of Bunts Associations. However, this time around there was disenchantment against two-time winner Kateel, because of his failure on this front. “Kateel should have tried to put forward the community’s concerns on the matter,” Alva said. This though would not automatically translate into support for the Congress, Alva said, because the disenchantment was against the political class as a whole.
Behind this outpouring of anger is the history of Vijaya Bank, one of the five big banks from the region that survived into the 21st century. Between 1906 and 1931 — when Vijaya Bank was established — Corporation Bank, Canara Bank, Syndicate Bank and Karnataka Bank were all founded in the then undivided South Canara district, which was divided into Dakshina Kannada and Udupi districts after Independence. Following the lead of Corporation Bank, which was started by a Muslim trader, Canara and Syndicate were opened by members of the Konkani trading community. It was only a matter of time before the landowning and agriculturally dominant Bunt community asserted its presence. “It was more like a silent revolution by these communities based on the need to mobilise capital,” said Udaya Barkur, professor of history at Mangalore University, adding that this community competition is still visible in the district. “Initially, these institutions are formed as a means to serve their communities but with their increase in popularity they also become major revenue earners. Today, the Bunts, Konkanis, Bearys Muslims and the backward Billavas have their own educational and medical establishments,” he said.
In the years since Vijaya Bank’s formation, it grew at a moderate pace till Mulki Sunder Ram Shetty, who was the chairman of the bank from 1969 till its nationalisation in 1980, led its expansion. Credited as the architect of Vijaya Bank’s success in the 1960s and 1970s, he managed to retain hold of the Bank even as Canara and Syndicate were nationalised in 1969. This historical association, Subbayya Shetty said, was further strengthened when Vijaya Bank rallied around the Bunt community after the land reforms. “In those years, a significant number of Bunts were absorbed into the bank,” he said, adding that at its peak, the Bunt community formed 28% of the bank’s workforce. And despite the bank’s nationalisation in 1980, it retained a connect with the community. Of the 2,234 total branches , 635 (28%) are located in Karnataka. Of those, 141 (22%) are located in just the Dakshina Kannada and Udupi districts, as per Reserve Bank of India data.
It is for these reasons that the bank has found itself embroiled in electoral campaigns. Ahead of last year’s state assembly elections, the BJP brought up the banks’s legacy when it promised to rename an arterial road in Mangaluru city after Sunder Ram Shetty if it was elected.
According to a press release issued by the Press Information Bureau on January 2, this was the first-ever “three-way consolidation of banks in India, with the amalgamated bank being India’s second largest Public Sector Bank”. It further stated that the amalgamation “will help create a strong globally competitive bank with economies of scale and enable realisation of wide-ranging synergies”. The merger has been challenged legally with petitions pending before the Supreme Court. Dinesh Hegde Ulepady, a lawyer involved in the case, said the merger felt cruel “because the Bank of Baroda and Dena Bank were making losses and Vijaya Bank was turning in a profit”.
However, the real letdown, according to Ulepady, was the apathetic attitude of the major political parties. “It is not enough to hold symbolic protests,” he said, adding that there are two petitions before the SC, one challenging the failure to nominate bank employees on the board, which predated the merger. “The other is a petition challenging the merger itself,” he said.
First Published: Apr 18, 2019 06:33 IST