Dismissing reports about bank closure, Reserve Bank of India (RBI), on Wednesday, has said that news circulating around in social media about the Central Bank closing down certain commercial banks are false, according to ANI. Supporting the Central Bank's statement, Finance Secretary Rajeev Kumar too has added that there was no question of bank closure, as reported by ANI. He added that such mischievous rumours are baseless, as banks are articles of faith. Explaining the RBI's role in strengthening the economy, he said that the Centre was strengthening PSBs with reforms and infusion of capital.
Finance Secretary Rajeev Kumar: There are mischievous rumours on social media about RBI closing some banks. No question of closing any public sector bank, which are articles of faith. Rather govt is strengthening PSBs with reforms&infusion of capital to better serve its customers pic.twitter.com/AtjQZMeG2S— ANI (@ANI) September 25, 2019
These statements by the RBI and the Finance ministry come a day after the RBI on Tuesday, imposed operational restrictions on Punjab and Maharashtra Co-operative Bank (PMC Bank), resulting in chaos outside its branches in Mumbai, according to PTI. As per the RBI directions to PMC Bank, withdrawals have been capped at Rs 1,000 per account and the bank is not allowed to make any fresh loans. The RBI has not specified the reason for this move. The restrictions will be in force for six months, the RBI said.
The statement also comes a day before four lakh bank employees across India are all set to go on a two-day nationwide strike on September 26 and September 27. The protest is aimed against the Centre's move to merge nine nationalised banks into 4 to overhaul the bank sector. According to the Secretary of the All India Bank Officers' Confederation's (AIBOC), Tamil Nadu unit, R Sekaran the four unions representing the employees have accused the centre of taking a 'unilateral action'. The employees are demanding their pending wage revision, reduction in service charges levied by banks on customers and increased staffing to handle the additional workload. This strike is inspite of the Finance Minister's assurance that no job will be lost due to the PSBs' merger.
Finance Minister Nirmala Sitharaman on August 30 had announced the four big Public Sector Bank mergers. According to the government, 10 public sector banks are merged into four parts, as a move to boost the economic reforms. She had listed the enhanced network of branches due to the merger. Speaking about the advantages of merging the banks, FM Sitharaman had said that there will be great cost reduction due to network overlaps and cost-saving for the joint ventures among others. India will now have 12 Public Sector Banks from 27 Public Sector Banks after the merger.