It refers to country’s second-largest public-sector bank Punjab National Bank considering closure of about 300 loss-making branches out of total about 7000 branches. It is noteworthy that Reserve Bank of India (RBI) gave liberty to banks for merger, shifting or closure of their branches in urban areas without seeking prior RBI permission. Step was needed long ago when branches of an individual public-sector bank became too close because of merger of small public-sector bank in the bigger one.
It is time that long-awaited merger-plan of public-sector banks into some bigger ones may be implemented soon to further bring down overheads in running surplus bank-branches. Reducing number of banks will largely reduce need of clearing-operations where funds could be transferred by bank-transfers rather than clearing.
With secured service or suitable compensation through Voluntary Retirement Scheme, employees of nationalised banks have no reason to oppose merger of public-sector banks. Moreover in case of any such mega-merger, further recruitments in banks can be suspended till the surplus staffs are suitably accommodated. Otherwise also, presently at some branches with significant work-load, shortage of staff is faced which will then be overcome by utilisation of staff found surplus out of the mega merger-plan. All this does not suggest for any forced retirement or termination of any bank-employee unless so desired by the employee under Voluntary Retirement Plan.
Subhash Chandra Agrawal
(The views expressed by the author in the article are his/her own.)