Jaitley assured no job losses due to banks merger

Finance Minister Arun Jaitley today assured Lok Sabha that there would be no loss of jobs due to merger of public sector banks. Referring to recent decision of the cabinet to merge Vijaya Bank and Dena Bank with Bank of Baroda, he said that there would be no job losses due to merger of these banks.

Moreover, Jaitley said that the move would create a bigger entity like the State Bank of India (SBI). The cost of lending could also become cheaper, he added.

During the Question Hour, the minister said that out of the 21 public sector banks, 11 are under PAC (Prompt Corrective Action) framework. PAC is initiated against banks that have high levels of non-performing assets (NPAs).

Replying to a supplementary question, Jaitley said the curve of non-performing assets would go down and that the Insolvency and Bankruptcy Code has helped in bringing back around Rs 3 lakh crore into the system.

Jaitley said that the State Bank of India (SBI) and other public sector banks have been making operational profits. They incurred losses due to provisioning for non-performing assets, he added.

With regard to recapitalisation of Public Sector Banks (PSBs), the minister said that Rs 51,533 crore has been infused into them in the current financial year till December 31. “In the budget estimates of FY 2018-19, Rs 65,000 crore has been allocated for recapitalisation of PSBs and an amount of Rs 51,533 crore has been infused in PSBs till December 31, 2018,” he added.

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