BHUBANESWAR: Unemployment and price rise, the two major problems afflicting the common man today have been aggravated by the banking sector reforms, former West Bengal finance minister and Chairman of the Empowered Committee of State Finance Ministers Asim Dasgupta said on Saturday. The changing priorities and dilution of social direction of banks have not only posed serious threat to the socio-economic uplift of the people but also are exposing the country to the effects of global financial meltdown situations. Addressing a seminar on “Economic crisis -Banking reforms in India”, organised by the All Orissa Bank Employees Federation (AOBEF) here, Dasgupta said, there has been a systematic attempt to rob the PSU banks of their nationalised character and remove the welfare and regulatory role of the Government in the banking sector. There is a persistent dilution of the Union Government’s holdings in the PSU banks following economic liberalisation. While opening doors for private banks, the share of GoI in PSU banks has come down from 100 per cent in 1991 to an average 80 per cent at present. Even in some instances like Bank of Baroda, the Government holding has gone down to as low as 51 per cent. Consequently, the share in bank assets of the country by private banks has gone up to 20 per cent over the years. The banks are now losing the welfare direction and are becoming profit-oriented. Priority sector lending has decreased drastically and affecting common man and important sectors like agriculture and micro small and medium enterprises directly. As per statistics by the end of 2010-11, of the total credit deployment by the banks, an overwhelming 68 per cent was in the metro cities, 17 per cent in urban centres and 9 per cent in semi-urban areas. “The bulk of the credit deployment at 94 per cent was confined tor urban areas while the rural areas, which have 75 per cent of the country’s population had to make do with only 6 per cent. More than 50 per cent of the PSU banks missed the targets of priority sector lending, but they have not even been questioned for the failure,” Dasgupta rued. He warned that the Banking Laws (Amendment Bill) 2011, which has been tabled in Parliament will push the country to the brink of disaster. This has to be fought against and the Government pressed to change its policies, he stated.
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