SARCAJC

SOUTH ASIAN RESEARCH CENTRE FOR ADVERTISEMENT, JOURNALISM & CARTOONS

Sarcajc Research in Journalism Advertisement & Cartoon 

According to INTUTE- “South Asian Research Centre for Advertisement, Journalism & Cartoons (SARCAJC) is South Asia's first study centre for research into the history and political importance of cartoons, political satire, advertisements and journalism..”. 

Post merger 'Big Bank' is 'Big bureaucracy', but will it be efficient for Main Street?

All one hears is formulation of a Big Bank- post merger. What is the evidence that post merger, the largest public sector bank- State Bank of India will perform better? Does “Big is good”- not a phrase sung post financial crisis of 2008, reflect on recklessness of the giants and government cushioning them bailout packages? Who can forget that the U.S. government had spent billions of dollars on bailouts to keep big banks from failing and wrecking the U.S. economy? Greg had pointed Democratic presidential candidate Bernie Sanders had built his campaign on the claim that big banks are a menace to society and should be broken up. At the root of these concerns is that if any financial institution is so big or important that the government can’t let it collapse, investors will lend to it too cheaply. That de-facto subsidy provides an advantage over smaller competitors and encourages management to borrow too much, making it more likely to collapse. And that "too big to fail" subsidy emerged afterward, as government bailouts, in particular after the failure of Lehman Brothers in 2008, made it clear that no big firm would be allowed to collapse. (WSJ. 2 March 2016). Lisa Lambert reported that none of the eight systemically important banks, which the U.S. government considers "too big to fail," fared well in the evaluations by federal regulators. Five out of eight of the biggest U.S. banks did not have credible plans for winding down operations during a crisis without the help of public money. So why go for merger to build a big bank? Ben Bernanke also had to concede- “…It’s true that economists disagree on the returns to size in banking. There are no doubt diseconomies of scale as well (e.g., ‘Too Big to Manage.’)”.

But, here in India, it seems the Ministry of Finance thinks big is good as in March last year, PTI quoted finance ministry officials, reported that the government wants to create 4-5 global sized lenders. (Economic Times, 5/6/2018). Is this being “Éxtra careful”?

The news of proposed merger with SBI did not go well with public sector bank employees. Around 8,00,000 employees of public sector banks went for one day strike to protest against the proposed merger of SBI associates with the State Bank of India(SBI). Further, the central trade unions went for a nationwide strike to protest against the Modi Government’s “unilateral labour reforms and anti-worker policies”. In contrast, news of merger of State Bank of India with its associated Banks, namely State Bank of Mysore, State Bank of Travancore, State Bank of Bikaner & Jaipur, Bhartiya Mahila Bank was viewed positively by the Indian stock market, with appreciation in their share price. The Indian Finance Minister seemed least bothered with merger concerns of workforce - “The (banks’) merger is not the subject of trade unions” . Should concerns of these bank employees be disregarded?

Experience of IA-AI Merger: Fall-out

After the much proclaimed merger, big Air India (after amalgamation of Indian Airlines) is today grasping for breath and with massive debt in its kitty. The National Airline is alive on dole from the government on tax payer’s expense. The government in last five years tried to get rid of airline but in vain. Given the history of failed merger of Air India with Indian Airlines, it is clear that success of merger is not just determined by calculation of net assets/liabilities on the spread sheets that is being orchestrated by financial wizards and digested by the stock market. There are other factors that hold the key for the success of the merger. Few years ago, the Aviation Secretary of Government of India had conceded that Merger of Indian Airlines (IA)and Air India (AI) was failure-“The kind of advantage we thought we could derive (from the merger) were bogged down due to HR issues”. This merger had taken place on 1 April 2007, but surprisingly it took nearly one decade for the Government of India to realize the importance of management of change with regard to Human Resources.

Will the SBI Merger follow the IA-AI Merger path?

Air India-Indian Airlines merger

Under RTI Act, on 28/8/2017, I asked few queries regarding merger of Air India with Indian Airlines which should have been responded within 30 days but till date Air India has not sent any response to me (despite appeal to first appellate authority of Air India!) Surprisingly, copy of response by Appellate Authority of Air India- Ms Ritu Jain dated 8/11/17 was provided to another individual who had also asked similar questions to Ministry of Civic Aviation that forwarded it to Air India to respond!

(1) Was any pre-merger study conducted/commissioned by Air India that revealed probable positive & negative effects of merger of Air India with Indian Airlines? If yes, please provide certified copy of this study. Please also provide details of people (including educational qualification) who conducted this study along with funds allocated to them

(2) Were employees/trade unions/associations associated with Air India & Indian Airlines consulted before merger of Air India with Indian Airlines? If yes, please provide certified copy of their opinion about proposed merger.

RESPONSE of Air India- “The information sought through above queried on merger of Air India and Indian Airlines is not available with Air India Ltd. However, the Govt of India will have these details”.

No details were provided by Air India or by Government of India.

(3) Please provide details of ‘organizational culture’ of Air India? Has organizational culture’ changed post merger in Air India? If yes, please provide details.  

RESPONSE of Air India- “No such document of organizational culture is available with Air India Ltd.”

(4) Please provide details of Human Resource practices prevailing in Air India. Has Human Resource practices changed in Air India post merger? If yes, please provide details of the change.

RESPONSE of Air India- “The information sought though above query is not clear and specific as to which human resource practices you are asking about. Hence the same cannot be provided under section 2(f) of the RTI Act. “

(7) Is the salary provided to employees of Air India based on ‘pay for performance’? If yes, how is performance of an employee judged? Please provide details regarding criteria on which performance of employees are judged? Is performance appraisal of all employees done every year?

(8) Post merger, has any study been conducted that revealed that merger of Air India & Indian Airlines has not been successful due to issues in Human Resource? If yes,, please provide certified copy of this study. Please also provide details of people (including educational qualification) who conducted this study along with funds allocated to them.

RESPONSE of Air India- “The details sought through above queries does not constitute information’ as defined under section 2(f) of the RTI Act 2005. Hence the same cannot be provided.”

Air India which was 11,311 permanent employees and 2759 contractual has no organizational culture on document! Not surprising, the merger has been a failure.

For rest of the queries, Air India chose did not reveal! What could be the reason for Air India not revealing information? Does this indicate an attempt to hide merger failure? The Air India has been under heavy burden of heavy debt, on which many articles have appeared in the Indian press.

The Economic Survey of India did call for Privatisation of Air India, but where is the meat?  Is just privatisation, a cure for all, must ask debt ridden private sector airlines- Kingfisher, due to which higher end officers of IDBI Bank are in jail? The recent attempt by government of India to privatize this airline has failed. Surely, privatization is no cure to ailing airlines.

Flash from Past: READ on – SARCAJC.com had raised voice: ...The ownership of an organization per se has nothing to do with its efficiency. (see Annexure-1). However, during this time, industrial relations environment has been far from cordial and no efforts seemed to be have made to involve employees in the internal revamping plan, if any. Infact, members of two unions went on flash strike against management’s advice not to tarnish the image of the company by airing their views to press on 25th May 2010!

Will the SBI Merger follow the IA-AI Merger path?


SBI Pre-Merger Study: HRM?

I took the aid of Right of Information Act (05) & sought information about SBI merger on 23/8/2016 from these banks- One of the queries read-“ Has the bank undertaken pre-merger study regarding employees/human resources? If yes, what are key findings”.

It took SBI around three months to respond, though other banks responded within stipulated time period of one month (according to RTI Act).

Take a look at response:

State Bank of Mysore- “NO”
State Bank of India- “No such information held with us”
State Bank of Bikaner & Jaipur has stated- “information asked is not specific & due to clarification and questioning nature, does not fall under section 2(f) of the RTI Act”.
State Bank of Travancore- “the question is in the nature of seeking opinion of CPIO. Questions seeking opinion /advice of CPIO does not qualify to be treated as a request for ‘information’ as defined under Section 2(f) of the Act”.
Bhartiya Mahila Bank- “The query does not fall under the RTI Act 2005. Further, information sought is exempt under section 8(1) (d) of the RTI Act 2005. Hence, not provided”.

SBI did not conduct any pre-merger study regarding employees/Human Resources
Only CPIO of State Bank of Mysore responded straight with “No”. It appears that response by CPIO of State Bank of India- “No such information held with us” can also be read as “No”. CPIOs (who are also employees) of State Bank of Bikaner & Jaipur , State Bank of Travancore, Bhartiya Mahila Bank did not respond & tried to take the cover of under RTI ACT (05) Though queries about merger should have been responded by to-be merged banks as it falls under section 4 of the RTI Act, but for reasons best known information was denied to me.

It is a matter of concern that Transferee Bank- State Bank of India did not conduct any pre-merger study regarding employees/Human Resources.

The State Bank of Mysore and State Bank of India have also not conducted any pre-merger study regarding employees/Human Resources: indicates the care-not-attitude regarding the importance of integration of workforce of the concerned banks. The fact CPIOs (who are also employees) of other 3 to-be-merged banks did not reveal that no pre-merger study has been conducted regarding employees/Human Resources raises serious concern about the success of forthcoming merger.

Why hide the truth? Does this reflect job insecurity? Job insecurity is a subjective phenomenon: cues that are objectively available are perceived as threats to the continuity of one’s job. Critical to feeling of job insecurity is the individual’s felt vulnerability originating with his or her perception of threatening signals in the work environment as Van Vuuren would state. The degree of job insecurity is defined as perceived powerlessness to maintain desired continuity in a threatened job situation (Greenhalgh, 1984).

MINISTRY OF FINANCE (Department of Financial Services)’s Merger Order published in the Indian Gazette clearly stated:

“Whereas, the State Bank of India (hereinafter referred to as the Transferee Bank), with the sanction of the Central Government and in consultation with Reserve Bank of India, has entered into negotiations for acquiring, by way of amalgamation, the business including the assets and liabilities of the (to be merged bank)(hereinafter referred to as the Transferor Bank); And, whereas, the terms and conditions relating to the acquisition have been agreed upon by the Central Board of the Transferee Bank and the Board of the Transferor Bank in the form of a Scheme”

The consultations have agreed upon by Central Board of the Transferee Bank and the Board of the Transferor Bank in the form of a Scheme but neither the shareholders not the employees have been in the loop.

The employees of all 6 banks got 15 days to decide whether to accept a new job with the State Bank of India or opt for voluntary retirement via an ‘option letter’ that will given to them as part of the merger of India’s largest bank with its four associates, disburses job insecurity among employees (RTN.com. 18/8/2016).

Ministry of Finance (Department of Financial Services)’s Merger Order published in the Indian Gazette further stated:

“ The permanent and regular officers or employees of the Transferor Bank shall be given an offer of employment in writing (hereinafter referred to as the option letter) by the Transferee Bank and where an officer or other employee of the Transferor Bank does not exercise any option, within a period of fifteen days from the date of the option letter given for exercising the option, to be in the employment of the Transferee Bank, such officer or employee shall be deemed to have accepted to continue in the service of the Transferee Bank.

The officers or other employees who have retired before the effective date from the service of the Transferor Bank or opted not to join in the service of the Transferee Bank on and from the effective date and entitled to any benefits, rights or privileges from Transferor Bank shall be entitled to receive such benefits, rights or privileges from the Transferee Bank:

Provided that any officers or employees of the Transferor Bank who opt not to join the service of the Transferee Bank on and from the effective date shall not be entitled to notice or compensation, whether for retrenchment or otherwise (including for loss of office or employment or premature termination of his contract of employment with the Transferor Bank).”

It appears that employees of to be merged banks were given an option -take it or get out, speaks of a total power-coercive merger.


Procedural Justice not followed

Psychologists have been long interested in explaining individual’s reaction to their encounters with other people, groups and organisations. The first school of justice deals with distributional, that is the effect on individuals of the outcomes associated with their relationships or encounters. The second school of justice deals with procedural issues. It revealed that individual’s reaction also depends on the fairness of procedures used by the other party to plan and implement resource allocation decisions.

In case of merger of SBI with associated banks, procedure justice has not been followed:

(1) Before introduction of merger, it has not been discussed with the employees and they have no say in terms and conditions of merger.
(2) The employees have been given option to either accept the merger or quit.
(3) The merger has not been discussed with all shareholders.
(4) Regarding outcomes, there is no study in public domain to show post merger, to-be-merged banks will benefit.
(4) There is no consistency in merger as Bhartiya Mahila Bank (Indian women Bank)’s aim is entirely different from associated Bank. Moreover 4 associated to be merged banks are regional centric- Travancore (in state of Kerala), Jaipur & Bikaner (in state of Rajasthan), Mysore (In the state of Kerala), Hyderabad (in state of Andhra Pradesh). Their mission, vision, values are different from that prevailing in the State Bank of India.

Post Merger, Hindu business line on 8/9/2017 reported that Officers and clerks working for the erstwhile associate banks feel they have been given a raw deal with several instances of arbitrary transfers and many officers losing out on their seniority post the transfer. Post Merger, during my unstructured interviews with 25 erstwhile Managerial employees (including officers) associate banks expressed their unhappiness over lack of promotion opportunities in ‘Big’ State Bank of India. They too felt that they have been given a raw deal due to merger, but felt helpless as there was no opportunity for them to change their job. However, pre merger, junior officers of to-be-merged banks had expressed happiness to be associated with ‘Big’ SBI. They also complaint that they are been treated badly by ‘original’ employees of SBI.

Is merger simple?

Power-Coercive Merger
The Indian media seem to have celebrating the merger, BIG bank. However, a merger involves organization change that can involve change in social-technical system, attitude, skill, values, culture etc. The change is not as easy as Lewin’s phases-”unfreezing-changing-refreezing”. Of the change strategies presented by Chin & Benne, namely empirical-rational, normative-reductive and power-coercive, it seems the last strategy was operational for this merger.

One of the central tenets of change theory is that of Unfreezing (Lewin, 1966). Before the merger, the employees can accept & respond positively to change, but for that they must recognize why the merger is necessary. A well-managed, the process of unfreezing involved enhancing employee’s sense of psychological sense of safety (Schein, 1992). One of the efficient ways, the management can enhance employee’s psychological sense of safety is by high quality communication about the merger and the reasons for it (Bies & Shapiro, 1987: Cummings & Worley 1993). But SBI didn’t conduct any pre merger study!

Organizational identity is activated by merger. This is the situational effect that Scherif (1966) had highlighted in realistic group conflict theory. During my conversations with employees of small to-be-merged banks, majority were worried that their distinct identity will be lost for over and the big inefficient SBI will just bulldoze their profits. They were worried that their achievements that were possible in old bank will not be recognized after merger and their effects will be lost. Majority respondents of to be merged banks were critical of working of employees of SBI, some called it as “big bully”. Achieved identity represents the degree of status and acceptance that an individual feels she/he has acquired within the work environment.  

Can forced compliance change core assumptions prevailing in an employee’s mind, even after fulfilling distributional & procedural justice theories? It is assumed that forced compliance change will arouse dissonance in the minds of the employees, which they might resolve by changing their beliefs. However, the precondition of this to happen is the availability of choice as mentioned by Eiser, which is absent in case of this merger of these banks. The negative affect due to breach of psychological contract will have a long term affect.


Organizational Culture

O’Reilly and Chatman define corporate culture as “a system of shared values that define what is important, and norms that define appropriate attitudes and behaviors for organizational members” (O’Reilly and Chatman 1996, 166)  Schein defined organizational culture as “a pattern of shared basic assumptions that was learned by a group . . . that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to [the group’s] problems” (Schein 2004, 17).


Organizational Culture change?

The most difficult is to change organizational culture as any attempt to change implies change in prevailing core beliefs and assumptions. At the deepest level, culture is thought of as a complex set of values, beliefs and assumptions that define the ways in which an organization conducts its business. Such core beliefs and assumption are manifested in the structure, system, symbols, myths and patterns of rewards inside the organization (Pettigrew, 1990:226). The above said arguments treats organizational culture as a variable- something organization has. The second stream is closed aligned to anthropologist’s view- culture is what an organization is. It is believed that culture is the product of negotiated and shared values emerging from social interaction (Meek. 1992). Organizational culture can be analyzed at different levels from visible artifacts- offices, dresses. However to analyze why employees behave the way they do, it is important to look for the values that govern behaviour and to find out the underlying assumptions.  

Transferee & Transferor Banks not revealing Organizational culture

I took the aid of Right of Information Act (05) to ascertain seriousness about merger -“ What is organizational culture of your bank? Has it changed since 1991? If yes, please provide details”.

Look at the response of CPIOs of Banks regarding organizational culture:

(1) State Bank of Mysore has stated- “ The query is in nature of seeking opinion of the CPIO, and does not constitute information vide 2(f) of the RTI Act, 2005”.
(2)State Bank of Bikaner & Jaipur has stated- “information asked is not specific & due to clarification and questioning nature, does not fall under section 2(f) of the RTI Act”.
(3) Bhartiya Mahila Bank has stated - “The query does not fall under the RTI Act 2005. Further, information sought under section 8(1) (d) of the RTI Act 2005. Hence not provided”.
(4) State Bank of Travancore has stated-“We have not formulated any organizational culture for our Bank”.
(5) State Bank of India has responded- “Query is not clear”.

For State Bank of Travancore, with 14892 employees, to state that the Bank has not formulated any organizational culture of the bank, is indeed a cruel joke on organizational behaviour! Unlike other banks, this Bank had mentioned in its Annual Report -“To strengthen a sense of ownership’ among the employees, the bank has began a process of ‘Rediscovering the soul of SBT’. ‘Proud to be an SBTian’is the theme of the process with Bank’s anthem, oath and flag being the external symbol of bank’s ‘pride’ of ownership.” This bank has conveyed pride in its royal history by recently establishing a museum of its history!

Four Transferor banks have neither revealed their ‘organizational culture’ nor the changes in organizational culture since decisive year of economic liberalization in India- 1991. It seems CPIOs of State Bank of Mysore, Bhartiya Mahila Bank and State Bank of Bikaner & Jaipur have forgotten the contents of RTI Act 2005, which starts off-“An Act to provide for setting out the practical regime of right to information for citizens to secure access to information under the control of public authorities to promote transparency and accountability in the working of public authority..” & section 4 of this Act.

For Transferee Bank- State Bank of India, with 207739 employees, to state query about organizational culture– “not clear” is a big joke. Indeed, getting organizational culture right is crucial for efficient performance, but it seems the management of these banks has failed to recognize this. By not revealing the contents of organizational culture speaks a lot about organizational culture prevailing in the State Bank of India!

This is in contrast from Deutsche Bank which declares on its website-”Creating a stronger bank rooted in a strong culture”.
American Bank on its website has declared its culture- “ At Bank of America, our culture comes from how we run the company every day. At the heart of our responsible growth strategy is our commitment to "act responsibly," which includes our commitments to ethical behavior, acting with integrity and complying with laws, rules, regulations and policies that reinforce such behavior.

Surely, organizational culture is not a secret that cannot be revealed under RTI Act! And is not a mystery that makes this query – “not clear”!

Why not reveal Organisational Culture: Secrets, any?
Indeed, getting organizational culture right is crucial for efficient performance, but will the top management of these banks recognize this first? What kind of merger is this when Transferee Bank is not even willing to reveal its present organizational culture!

Pioneering Sociologist Max Weber had long ago observed- “Every bureaucracy seeks to increase the supremacy of the professionally informed by keeping their knowledge & intentions secret. Bureaucratic administration always tends to be an administration of ‘secret sessions’: so far as it can it hides its knowledge & action from criticism”. The ICI, Jaguar and related Warwick studies had revealed the following factors important in facilitating change in corporate culture among others- Altering management process at the very tip, finding role models. (Pettigrew, 1990).When top management of SBI continues to get awarded, irrespective of health of bank, what beliefs and assumptions gets tickled down to rest of the employees is not difficult to guess!

Kanter had defined power as the capacity to mobilize people and resources to get things done. Taking off from Kanter, organizational power comes from information, mobilization & support. The information flows in Big SBI will be limited due to lack or poor communication between hierarchical levels. As each hierarchical stratum is isolated from each other, the decision makers are not aware of the problems & requirements as information does not seem to flow from bottom to top in a bureaucracy. In terms of mobilization & support the initiators of change (read top management) are unable to attain power to bring about a successful change. While the employees of bureaucratic organization (Big SBI), recipient of change won’t have much opportunity to influence any change, tension can arises that could affect performance.


Any change in Transferee Bank?

The Annual Report of SBI highlights vision/Mission/values of State Bank of India. Has there been any change- Post merger? Take a clue from the written words.

Pre merger, the annual Report 2015-16 highlighted vision (Our vision) in bold, capital letters:

SBI’S Vision (2015-16): MY SBI, MY CUSTOMER FIRST, MY SBI: FIRST IN CUSTOME SATISFACTION

SBI’s Vision (2018-19): Be the Bank of Choice for A Transforming India

Post merger- customer, customer satisfaction has been trashed from SBI’s vision. The emphasis is rather on non measurable vision, which appears rather vague for the largest public sector bank in India. India has been continuously transforming, why this emphasis after merger?


Check-point-1

I conducted a random an anonymous survey of 100 customers of SBI (post merger) which revealed the following:

5% agreed that to SBI, customer is first.
2% agreed that SBI provides best customer service to them.  

The perceived thoughts might be subjective but it reflects general feelings of a randomly selected small sample, which in future research studies can be judged by taking a larger sample.

Mission Change

SBI’s Mission: Committed to Providing Simple, Responsive, and Innovative Financial Solutions (2018-19)

SBI’s Mission during 2015-16:
We will be prompt, polite and proactive with customers.
We will speak the language of young India.
We will create products and services that help our customers achieve their goal.
We will go beyond the call of duty to make our customers feel valued.
We will be of service even in the remotest part of our country.
We will offer excellence in services to those abroad as much as we do to those in India.
We will imbibe state-of-state-of-the art technology to drive excellence.

Post Merger: SBI’s Seven values has been reduced to only one. The emphasis is now on only Financial Solutions. Customers are totally out from mission, and so is banking in remote areas!

Check-point-2

I conducted an anonymous random survey of 100 customers of State Bank of India (post merger) which revealed the following:

2% agreed that to SBI (employees) were prompt, polite and proactive with customers.

0% agreed that to SBI (employees) went beyond the call of duty to make customers feel valued.

    1% agreed that products and services of SBI helps them achieve their goal.

0% agreed that SBI speak the language of young India

    6% agreed that SBI uses best technology to drive excellence.

    0% agreed that SBI should provide services abroad as much as in India.


Values Change:

SBI’s Values in 2018-19: Service, Transparency, Ethics. Politeness, Sustainability
SBI’s Values in 2015-16:
We will always be honest, transparent and ethical.
We will respect our customers and fellow associates.
We will be knowledge driven.
We will learn and we will share our learning.
We will never take the easy way out.
We will do everything we can to contribute to the community we work in.
We will nurture pride in India.

Post Merger, Net Values: SBI’s Seven values reduced to only four. Surprisingly, Honesty, Learning, Contribution to community, Pride in India have exited!

0% agreed SBI are always honest, transparent and ethical.
1% agreed SBI respect customers and fellow associates.
10% agreed SBI is knowledge driven.
0% agreed SBI learn and share our learning.
1% agreed SBI never take the easy way out.
0% agreed that SBI will do everything we can to contribute to the community we work in.
0% agree that SBI nurture pride in India.

The perceived thoughts might be subjective but reflects general feelings of a randomly selected small sample, which in future research studies can be judged by taking a larger sample.

Psychological contract of depositors

The concept of psychological contract has seen interest of Management Gurus mainly in light of employment relationship in organizations. However, customers of banks also have a psychological contract with the bank. A main street account holder has series of expectations from a Bank and he/she continues to hold his/her account in a particular bank.

Check-point 3

Depositor Psychological contract with bank

I interviewed (pre merger) 150 customers (depositors) of Associated Banks- State Bank of India to explore the contents of Psychological contract they have with the bank. The majority narrated the following contents:

Deposit is safe
Efficient customer service
Bank will not fail
High Interest rates
Efficient Redressal of grievance
Priority customer service to elderly
No Fraud
Good Behaviour
Related Identity
No harassment
Trust
Reasonable charges


Post Merger: Breach in Psychological contract?

The 150 customers (depositors) of State Bank of India felt breach in Psychological contract with the bank - Inefficient customer service, low Interest rates, inefficient redressal of grievance, no priority customer service to elderly, bad behaviour, harassment, no trust, related identity lost. All depositor interviewed, opposed the merger. Majority of depositor echoed that SBI was not a good bank. And felt that their Deposit will not remain safe and SBI would fail.

There is no visible plan of SBI in the public domain to manage this psychological contract breach of retail depositors. Is it because main street account holders are ‘small’ & assumed to be captive with no choice?

On the issue of reciprocity, the Bank too has expectations from account holder. But here is a difference from theory of Social Exchange, here is Business Exchange. The bank behaves differently with different category of account holders, doling out better treatment for the rich account holders.

Check point 4

Customer experience of dealing with State Bank of India

I interviewed 150 customers of State Bank of India (post merger) and asked them about their experience of dealing with State Bank of India. All were not satisfied with customer service the bank. The stress was more on lack of procedural justice than distributional. The customers of SBI narrated following complaints- none of employees wore name badge, the black board carried a unknown quotation without any change for many months, the television set was not working, the passbook printing machine installed at ATM was mostly of out order, KYC problems, low interest on deposits, SMS for withdrawal/deposit not coming, highly rude employees, long lunch break without scheduled time, non availability of branch manager, for new demat account opening bank employees refers to an outside agent, incorrect form 16A and interest certificate, no transfer of employees for many years, non-redressal of grievance neither at the branch nor at the central grievance redressal- they closed complaint without reading, forget redressing the problem, Banking Ombudsman  & Central Information Commission is soft while dealing with complaints regarding State Bank of India.

Majority of senior citizens and women I interviewed felt that they were treated badly by SBI employees. One senior citizen respondent narrated that SBI employees are unable to even print term deposit in readable form, and when he brought this to the notice of the Manager of SBI, he advised him to change his bank. “Better open your account in some private sector bank as this is normal course of functioning of this bank”. In many cases, account nomination was not registered, and when brought to notice it was registered but the nominee name was incorrectly spelled. Such is the level of harassment, that senior citizen did not wish to go back to again get the spelling of the name of nominee corrected in her passbook. Another senior citizen woman narrated a long tale how her relative had sent her a cheque in dollars but SBI branch employees wrote comments with red pen on the cheque due to which the cheque got dishonored, with no apologies from SBI! Majority of respondents (98%) felt that SBI employees favored corporates vis-à-vis individual saving account holders.

I looked at the Annual Reports of SBI for index of customer service, but it was not present in any report. The Annual report of SBI also did not carry details of complaints to Banking Ombudsman. However latest available Annual report of Banking Ombudsman reveal, maximum complaints were against State bank of India amounting to 26,531, per branch- 1.44. Compared to SBI, when its associated banks were also clubbed, per branch complains went down to 1.17. The following is the detailed break-up of complaints of to-be-merged banks:

 
     No of Complaints    Complaints per branch       
BMB               2    0.03       
SBBJ             1176    0.93       
SBM               298    0.29       
SBT               770    0.67    
Source: Annual Report Banking Ombudsman. 2014-15

Is customer service a parameter to judge performance of any branch of State Bank of India? I asked PIO, State Bank of India, under RTI Act- “What is the criterion for judging performance of any branch of your bank?” The CPIO of State Bank of India who is also Deputy General Manager (RTI) responded- “No such information is held”! Now this should not have been secret! The same query was asked to State Bank of Mysore, CPIO revealed- “The branch performance is judged with the level of advances, deposits and profit generated for the financial year”. So, it is clear that customer service is absent here.


SBI Merger: RTI
Check Point -6

Why Merger?

No pre-merger study was conducted by SBI

Strange SBI Maths
Organisational Culture = Organisational Structure!
Under Right to Information Act (2005) I asked State Bank of India vide letter dated 28/8/2017-“Was any pre-merger study conducted/commissioned by SBI that revealed probable positive & negative effects of merger of SBI with associated banks? If yes, please provide certified copy of this study. Please also provide details of people (including educational qualification) who conducted this study along with funds allocated to them“

The response of Central Public Information officer (CPIO) of State Bank of India vide letter dated 20/10/2017 was revealing - “No post-merger study was conducted”. Wow! The largest public sector bank also did not provide any information/details of employees of SBI & associated banks that had availed VRS after announcement of merger, stating flatly-”No such information is available”.


Post Merger: changes in Human Resource Management?

In response to my query-”please provide details of changes in Human Resource Management policies at SBI, post merger till date”, the response of SBI was revealing –“ No such information is held”!

In response to my query-”Please provide details of organisational culture“ of SBI. Has organizational culture of SBI changed post merger? If yes, please provide details“., CPIO SBI asked me to look into its website for-”SBI organizational structure”! Wow, never knew for largest public sector bank in India, organizational structure is organizational culture! Forget any expectations of managing organizational culture here- post merger!

Given but Not Given: Secret Communication?

And last but not the least, I requested under Right to Information Act - “After & before merger of SBI with associated banks, did Chairman of SBI communicate to employees of SBI & associated banks? If yes, please provide certified copies of the same”. CPIO SBI responded positively-”Chairman of SBI had sent 2 communications to employees of associate banks - one before announcement of merger and other after announcement of merger. Copies are enclosed herewith in 5 pages” but in reality, there were no enclosures with the response of CPIO SBI! Was this just a slip? Nope, my first appeal to First Appellate Authority of SBI (chief General Manager -operations) on 5/11/17 situated in Corporate Centre at Mumbai, I did not receive them. Strangely, what is there to hide, you wonder, right?

“Your Bank has merged its five associate Banks and Bharatiya Mahila Bank with itself on 1st April 2017. This is the first such large scale consolidation in the Indian Banking industry,   which   will   lead   to   increased   balance sheet size and economies of scale. With   this   merger,   SBI   has   entered   into   the  league  of  top  50  global  banks  with  a  balance  sheet  size  of    33  lakh  crore,  with  24,017  branches  and  59,263  ATMs  serving   over   42   crore   customers.   The   increased  balance  sheet  size  will  enable  your  Bank  to  command  better  terms  in  both  international  and  domestic  markets.  The   added   branch   network,   customer   base and staff strength will help it expand reach and enable the Bank to rationalise resources   and   redundancies   across   the   board.  Your  Bank’s  endeavour  will  be  to  optimise   costs   and   maximise   revenues   through  the  merger  synergies,  leading  to  significant  cost  savings  and  reduction  in  cost-to-income ratio…From   the   next   financial   year   the   solo   results   of   your   Bank   will   include   the   assets  of  Associate  banks.  The  merger  has  catapulted the Bank into the league of top 50  banks  in  the  world  and  has  increased  the   market   share   within   the   domestic   banking space. The size comes with its own advantage.  We  expect  the  cost  structure  of  the  bank  to  move  favorably  primarily  due  to  economies  of  scale  and  adopting  uniform  best  practices..” (Arundhati Bhattacharya. Chairman, State Bank of India. Annual Report 2016-17)


Post Merger: Did SBI gain financially?

The merger did have a negative impact during 2017-18, with net profit declining from Rs 105 to Rs (-) 65 billion. The return to equity declined from 7.52 to (-) 3.78 during the same period. Profit per employee declined from 511 to (-) 243. Merger enthusiasts would point to some improvement post merger in three key performance parameters in following year- 2018-19.

Post merger, deposits as well reserves & surplus showed an increase, as expected.
 
    Deposits (Rs billion)    Reserves & surplus (Rs billion)       
2016-17    20440    1870       
2017-18    27060    2180       
2018-19    29110    2200   

Post merger: SBI Domestic Branches Decline

Post merger, number of domestic branches of SBI declined from 22414 to 22010 during 2017-18 to 2018-19, though number of foreign branches increased by 2 during the same period. Since the watershed year of 2008-09, the considerable increase in foreign branches is seen. Number of foreign branches/offices of SBI increased from 92 to 142 during one year (2008-09 to 2009-10), an increase of 54 percent.

The deposits in State Bank of India shows substantial increase from Rs 20447 to Rs 27063 billion, 2015-16 to 2016-17, an impressive increase of 32 percent. The demonetization effect is apparent. So, it will not be wrong to imply that like other banks, SBI was comfortable with liquidity.


SBI’s Net NPA to Net Advances increased from 3.71 to 5.73 during 2016-17 to 2017-18. But next year, this ratio has declined to 3.01. Does this mean better recoveries?


How does a bank reduce NPA? This is rather important to gauge as the way Public Sector Banks treats NPA contributes to building and reinforcing credit culture, which is part of Organizational Culture.

The obvious answer would be by undertaking recoveries. However there is another way- write-off NPAs and take credit for clearing ugly looking NPA from your balance sheet! The total write offs (including gradation) has increased nearly three times from Rs. 240 billion to Rs 367 during 31 March 2017-31 March 2019. The real net NPAs (excluding fresh NPAs) went up by whooping 91percent for the same period. Write-offs are nothing new to Indian Banks.

In a reply to Parliamentary Committee, the RBI, stated the following in respect of rate of recovery for written-off loans for a period of April 2014 to April 2018:

"Based on the data on write-off and cash recovery out of write-off for the 4-year period viz. FY 2014-15 to FY 2017-18, it was observed that recovery rate in PSBs was 14.2 per cent followed by Private Banks at 5.0 per cent. PSBs recovered Rs.449 billion during the 4-year period while write-off amount was Rs 3,165 bn. It has to be noted that the recovery takes place on total cumulative write-off and not only on write-off for a specific period….The decision to write-off loans fully or partially, actual or only technical, is a business decision taken by banks based on various viability factors viz., scope of up-gradation of a NPA asset into standard category, chances of recovery from such assets, market conditions, availability of security and its valuation. At times, such decisions are also taken keeping in view the taxation benefits that are available and to manage the level of Non-Performing Assets ratios (NPA) of banks. There have been instances where loans to certain category of borrowers have been paid by the State/Central Governments and in some such scheme banks may have had to write-off certain portion of overdue interest/principal as per the scheme floated by the respective Governments".

The Parliamentary Committee observed-“..that scrutiny of all NPA accounts/cases more than Rs 50 cr from the angle of possible fraud and closely monitoring them accordingly is not a fair and judicious process, as this will only lead to counterproductive results and in the demotivation of bankers in taking any lending risk. The Committee, therefore desire that RBI's guidelines in this regard should be reviewed.”. What kind of culture this observation will reinforce is not a secret.

CAG had reviewed the gross  NPA  recovery  rates  and  the  write  off  rates of  PSBs  over  2010-11  to 2014-15  and found that that  a larger component of the gross NPAs have been written off compared to being recovered.  

“ It is noticed that the actual recoveries were lower than the write-offs in all years except 2011-12. The quantum of write-off in 2014-15 was in fact ` 52,542 crore, significantly  higher  than  the recovery  of ` 41,236  crore  which  goes  against  the principle of DFS to ensure that recoveries match amounts written off.  DFS  stated  (May  2017)  that  they  were  in  agreement  with  the  principle  that written off amount should match with the recovery in accounts but the stressed asset  situation  in  PSBs  had  become  grim  during  the last  few  years  and  while special measures had been taken, it might take some time for normalcy to be restored in terms of asset quality”.
(Source: Report of the Comptroller and Auditor General of India (CAG) on Recapitalisation of Public Sector Banks. Union Government Ministry of Finance Report No. 28 of 2017 -Performance Audit)

FACT CHECK- Write off NPAs

How does a bank reduce NPA? This is rather important to gauge as the way Public Sector Banks treats NPA contributes to building and reinforcing credit culture, which is part of Organizational Culture. The obvious answer would be by undertaking recoveries. However there is another way- write-off NPAs and take credit for clearing ugly looking NPA from your balance sheet! The NPA write offs by public sector banks was Rs 6746 billion during FY 2001-02 to FY 2018-19. During the same time, the actual recovery was mere Rs. 4703. The turning point of the rise of write-off vis-à-vis actual recovery is 2014-15 and is increasing ever since.

Reading, writing - woman, you still think positively!.

Did you seek support from US? Women founders ever EXTINCT.

NPA: not new?
NPA is not new to India. Just a recap, during 1992-93, Gross NPA as a percentage of total advances stood at 23.18 percent, which went up to 24.78 percent, remained more than 15 percent till 1998-99. During 2000-2001, it was 12.40. On 31 July 2000, RBI called for suggestions from –“banks, financial institutions, market players and academia” on a discussion paper on PCA (Preventive corrective Action). Strangely, RBI didn’t invite any suggestion from depositors, media.

Indian Parliament on SBI Merger

The Government of India had approved the proposal for merger of (i) State Bank of Bikaner & Jaipur (SBBJ), (ii) State Bank of Hyderabad (SBH), (iii) State Bank of Mysore (SBM), (iv) State Bank of Patiala (SBP) and (v) State Bank of Travancore (SBT) with State Bank of India (SBI) and the same was notified in the Gazette of India on 22.02.2017.The State Bank of India merged five Associated Banks on 1 April 2017; However, the approval came Indian Parliament came much later-from the Rajya Sabha on 18 July 2017 and Lok Sabha on 10 August 2017.Ideally, approval from the Indian Parliament should have been sought before the merger, rather then mere mandatory ritual of introduction & passing the Bill to repeal the State Bank of India (Subsidiary Banks)Act, 1959, the State Bank of Hyderabad Act, 1956 and further to amend the State Bank of India Act, 1955.

“ This merger has catapulted SBI, India’s largest lender, into one of the Top 50 global banks. The merged entity has deposits worth 25.85 lakh crore and 18.62 lakh crore worth of advances on its books..” (SBI Annual Report 2016-17)


Of course the Government has a brute majority in Lok Sabha but what about Rajya Sabha? Did it get stalled in Rajya Sabha? Many Members of Parliament, both from Lok Sabha and Rajya Sabha raised concerns/objections; however, no amendments were presented and got the nod of both houses of parliament. Moreover, no member of parliament raised the question- why Bhartiya Mahila Bank (Indian women bank) was getting merged in the State Bank of India, along with associated banks.

Indian Parliament: Lok Sabha

On 10th August 2017, at 14.18 hours, Motion was moved in the Lok Sabha “That the Bill to repeal the State Bank of India (Subsidiary Banks) Act, 1959, the State Bank of Hyderabad Act, 1956 and further to amend the State Bank of India Act, 1955, be taken into consideration and passed by the Lok Sabha. Twenty four members participated in the discussion.

Many raised concerns over merger of Banks. Take a clue:

Mr S.P.M Gowda recalled people from Karnataka felt State Bank of Mysore was their bank… “But, by merging that bank with the State Bank of India, the people of this country, particularly the rural people, are feeling that there is some infringement of their rights in terms of getting loans from the nationalised banks. It has become a big bank. Now, only the corporate sector and the bigwigs are capable of entering this bank. The common man will now feel that the State Bank of India is not his bank. That is the feeling…..Sir, Rs. 1.8 lakh crore of NPAs are there in the State Bank of India. I think it would be appropriate to quote Shri Venkaiah Naidu, the incumbent Vice-President, who as a Minister made a statement that big people are responsible for higher NPAs and not poor people….the State Bank of India is imposing some stringent conditions on customers. Nearly 31 crore people are being affected by the decision taken by the State of India with regard to keeping a minimum balance in the saving accounts. Nearly 31 crore people of this country are going to be affected by this stringent action by the State Bank of India…..This is a very bad decision. How can we call this entire system as people-friendly? Furthermore, the bank proposes to impose charges for cash withdrawal and also service charges. All these decisions are anti-poor. These decisions are not in favour of the poor people of this country. We must feel in this country that the banks are meant for the common people…..Earlier minimum balance was Rs. 500 and now it has been increased to Rs. 1000…”.

Mr Shivkumar Udasi reacted to Mr S.P.M Gowda-“As was asked by my elderly colleague, Shri Muddahanume Gowda, what was the reason for which the merger has been done? The reason for the merger is like this. The guiding principle for the consolidation process of banking in India has so far been as per the Narasimhan Committee recommendations according to which the move towards the restructured organization of the banking system should be market driven based, on profitability consideration and brought about through process of mergers and amalgamations… The Narasimham Committee had envisaged in 1991 that the SBI should progressively merge all the seven subsidiaries with itself. It was recommended long back in 1991….. the associated banks had enjoyed a common identity with the SBI for long. They had shared the SBI’s logo, highly visible point of customer recall and rallying point for group affinity. Second, the SBI had been exercising the tight operational control of the associated banks from inception…..Third, all associated banks were operating under the same Information Technology platform like the SBI…”.

Prof Saugata Roy, an acclaimed critic of the government, started his Speech by clarifying that he is not opposed to the State Banks (Repeal and Amendment) Bill. However, he raised concern about charges imposed by the SBI for non maintenance of minimum balance and others, calling them” totally anti people decisions”. He also came hard on SBI. “State Bank of India is having the biggest NPA, Non-Performing Asset. The Non-Performing Asset of the State Bank of India is Rs.97,000 crore. Taking every bank together, the State Banks of Bikaner and Jaipur, Hyderabad, Mysore, Patiala and Travancore, it comes to Rs.1,40,000 crore. The bank is being badly managed and the Government has no reply. It is constantly issuing directives to merge them and they say we will make it one of the top banks of the world. If you compare it with the Citibank and even if you compare it with the ANZ Grindlays Bank, can you come up to that level of service? We are only hoodwinking the common people just by showing, we have done a big thing; we have merged all the banks into one. What is there?...”  Prof Saugata Roy ended his speech –“ That is why, I have no moral support for this Bill. We could have opposed the Bill. We could have given Resolutions and amendments but that is quite pointless. This Government, with its brute majority, will bulldoze the Bill in the Lok Sabha. We hope that our friends in the Upper House do put a brake to their coming forward..”.

Tathagata Satpathy categorically stated he is opposed to the Bill. “Five smaller banks – State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore and State Bank of Hyderabad – are being merged with the big ocean called the State Bank of India. The Government has already put it into effect. We are only doing a post-mortem and putting our stamp on it. It is a clear move to hide the immense amount of non-performing assets that these banks have accumulated over the years. This seems to be a stopgap arrangement to prevent these five smaller banks from collapsing inwards…. Let us recollect that the Chairman of SBI had asked for a bail out package to save the telecom sector on June 1, 2017.. Employees, who were supposed to do due diligence and locate genuine loanees had consciously defaulted. They, from the chairmen of the banks to the bank managers, to the assessors of the bank, all have connived at some point or the other to give out bad loans, whether it is to big corporations or to companies or corporates. As long as you do not take action against them, let us be very sure that even today, Sir, on 10th of August, 2017 as you sit in that Chair and as we are all talking about it today here, bad loans are being created because the same people are still working in those same banks. Unless you take corrective action, it will be there… Not all bank employees are crooks; I am saying some are. Similarly, there are some employees today who are conniving with crooked companies, crooked corporate to loot the country, to loot the poor man’s wealth. When you are merging these five banks, you are also taking that crooked staff into the State Bank of India. You are also continuing paying salary to those people….Sir, punishment today can be the sole deterrent for any wrong that might happen henceforth. So, let us take steps to create a situation where we do not tax the tax-payers even more into paying for the faults of these politicians, these bureaucrats and these bank employees. I am dreading a day when all these coalfired power production units declare themselves to be NPAs. What is going to happen to this country? That will, again, be billions of dollars worth of loans which will go bad….I remember – Sir, you were in the House at that time –when Mr. P. Chidambaram was the then UPA Finance Minister. He had told the House that they want to create few big banks by merging the smaller banks so that these will be so-called global banks. That was a name that he had coined. Little did we know that the system from inside was totally rotten. What they had discovered because of their bad management and bad governance, these people have also discovered it because of their bad management and bad governance. You are continuing the same process and you are trying to cover up the same ills….I pray that the people of this country realise as to where these people are leading us; what destruction they are creating; and how dark the future of this country is?”


De Boora Narsaiah Goud did same straight talking –“ …Today, the picture of a bank is bad loans, which is because of big people. No loans are given to the small people. There is also non-accountability aspect. Look at the bank loans which have been sanctioned to Kingfisher companies. Persons who are responsible to assess the viability of those projects are not touched. So, there is absolutely no accountability. …Are we going to miss this local flavour by merging it? Are we going to miss the regional focus of the bank? For example, the State Bank of Hyderabad has a focus in the Telangana State; Andhra Bank has a focus in the Andhra State; the State Bank of Travancore has a focus in Kerala. Are we going to lose the local focus? We have to be extremely careful about it…”. But, at he end of his speech, he supported the Bill-“I support the Bill”.

Mrs P.K. Shreemathu Teacher expressed opposition to the Bill from the very start of her speech. She focused on post merger effects on NPA, employee and customers- “the newly merged State Bank is showing huge increase in NPA and is pushing small borrowers to courts for recovery. This is pushing many customers to private banks or private financers. Sir, this Bill is not only anti-people but also anti-employees and anti-officers……The management of SBI advised the employees to exercise the option to either opting for SBI’s retirement benefits or associate bank’s retirement benefits. However, this was done without clarifying or giving details of the benefits available to those who opt for SBI’s retirement benefits which were different from what are being given to SBI employees….Although, the SBI employees and associate bank employees are recruited through the same recruitment process, the employees are treated differently even after it has become one entity. This is highly deplorable. Instead of hand-holding associate bank employees, they are being isolated pointing out various shortcomings. Presently, one-fourth of the employees of SBI are from erstwhile associate banks. However, SBI has done precious little to equalise the benefits being handed out to them….This year’s promotion exercise has clearly indicated that there is no scope of promotion for erstwhile association bank employees. In addition to reducing seniority by two years for top-management aspirants, the Bank has totally sidelined the eligible officers of associate banks in the promotion list announced. No one from the associate banks is promoted to CGM and GM grades and very few of them get promotion to other grades. This has pushed many associate banks employees in a state of depression and dissatisfaction. Then whom is the Bill going to help? It is not going to help the employees; it is not going to help the people; it is not going to help farmers..”

Mr N.K Premachandran opposed the Bill on two grounds-“ Sir, I rise to oppose this Bill in toto on two grounds – on technical grounds and also on merits. The technical objection which I would like to raise is that this Act is to repeal two Acts – the State Bank of India (Subsidiary Banks) Act, 1959, the State Bank of Hyderabad Act, 1956 and also to amend the existing State Bank of India Act, 1955. My humble question to the Government through you, Sir, is this. For what purpose, the Parliament functions? The Government has already merged banks. Five banks have already been merged with the State Bank of India. The Government has invoked Section 35(ii) of the SBI Act, 1955 and by invoking Section 35(ii) of the SBI Act, 1955 on 22nd February, 2017, the Government has issued a Notification and merged five banks with the State Bank of India. Sir, you may kindly see that. You are the guardian and you are the protector of our democracy and our Parliamentary democratic rights. For what purpose, the Parliament functions? The Parliament is a mere spectator when the Executive and the Government is merging five banks with the State Bank of India. We are mere spectators and, now, you want us to put a stamp on the Government or the Executive action for which they have put-forth this Bill. The Parliament is not just for putting a stamp on the actions of the Executive. It has its own rights and privileges to discuss and debate as to what are the merits and demerits or pros and cons of a particular action that has not been done without having a debate and discussion in the Parliament or without informing the Parliament. By means of issuance of a mere Notification on 22nd February, 2017, you have simply merged five banks with the State Bank of India. …The State Bank of Hyderabad is constituted by virtue of the State Bank of Hyderabad Act, 1956. All other four banks have been established by way of the State Bank of India (Subsidiary Banks) Act, 1959. These two are the creations of the Parliament. All these five banks are the creations of the Statute. These are the children of this Parliament. How can the children of Parliament be taken away by the Executive? How can you simply take away the children and give them to a grandmother or some paternal mother without informing the Parliament? …I feel that it is a breach of the right of the Parliament. The Executive can do anything. Since you have the majority, the Parliament will endorse it. This is not a good practice for the Parliamentary democracy….Sir, I am coming to the merits. By a unilateral decision of the Government, the State Bank of Travancore, State Bank of Mysore, State Bank of Hyderabad, State Bank of Bikaner and Jaipur and the State Bank of Patiala have been merged by the Government through a Notification. What is the idea behind this merger? The idea is to create a big bank of world-class size but in India we do not need very big banks. We need good banks to serve the needs of the common people. In USA and other countries, we have seen in recent years, big banks were a cause of turmoil and the Government had to pump in taxpayers’ money to save them. In USA, after global recession which took place in 2008, the Government doled out 2,250 billion dollars to save their banks. The myth that big banks are automatically strong was exploded after the global recession which took place in the US and the globe in the year 2008. On the other hand, if a bank is too big, it will become insensitive and inaccessible to the poor and the common people. Big banks will take care of big people only. Big banks tend to give bigger loans and earn bigger returns. Kindly see, in India, banks represent hard-earned savings of the poor people. Sir, 70 per cent of the total deposits of the banks are domestic savings of the common masses. Banks cannot take risk with the precious savings of the common poor/masses of the country. That comes to around 70 per cent of the people. Already the banks are saddled with huge bad loans and Government is unable to recover the same….After merger, SBI has started closing down the branches which means a reduction in service to the poor people. Is that the rationalisation, is that efficiency we are talking about? There are reports that people are not satisfied with the merger…We need bank expansion, not consolidation.”

Mr Jose Mani opposed the Bill-“..we find that the NPAs, Non Performing Assets, are on the rise in the Public Sector Banks and also in the Scheduled Banks. When you analyse the clientele who are making the NPAs, we find that a majority of them are the corporate clients with crores and crores of rupees as outstanding bad debts... We find their amalgamation with the SBI; many banks have been merged. As said earlier, we are doing this to cover up the bad debts or to spread the risk. But finally, what will end up is at the expense of the common man?.. Even if you take up this SBI, there was no such service charge initially.

But after luring the common man by asking them to open up an account, especially with merging, the accounts will go to the SBI and the charges have started increasing. For example, the SBI customers with a basic saving bank deposit, a facility for the poorer sections of the society, get four free withdrawals, including ATM withdrawal in a month. After which withdrawals will be charged at Rs. 15 plus service tax at an SBI branch and at Rs. 20 plus service tax at other bank ATMs. It is now mandatory for the SBI account holders to maintain a balance of Rs. 5,000 in metropolitan areas, Rs. 3,000 in urban areas, Rs. 2,000 in semi-urban areas and Rs. 1,000 in rural areas. For metro areas, if the difference between the minimum balance and the actual balance is 50 per cent, then the SBI charges Rs. 50 plus service tax as penalty. If the difference is anywhere between 50 per cent and 70 per cent, the penalty is Rs. 75 plus service tax. If the shortfall is more than 75 per cent, the charges are Rs. 100 excluding the service tax. People with meager earnings will find it hard to maintain the specified balance, if such exorbitant high service charges are imposed. SBI is literally robbing the depositors. I end up by saying that by merging and putting up more accounts of the common man in the SBI, we find that poor people are taxed and they are robbed. So, I oppose the Bill…”.

Adv. Joice George opposed the Bill-“ ..The result of amalgamation of all the State Banks is closing down of branches in the rural as well as the unbanked areas. It is because of this amalgamation that the banking concentration is decreasing in the backward areas as well as in tribal habitats where less privileged people live….The second aspect is service charge…The banks are trying to reduce their NPAs. They have devised a mechanism to declare the farm loans as NPAs on the basis of certain criteria. Earlier, the tendency of the banks was to give more and more benefits to the farmers so as to prolong their term of loans. But, now, after amalgamation, only for this purpose of reducing their NPAs, these banks are not touching the corporates, these banks are not taking steps against the corporates, but are taking steps against the farmers and declaring their loans as NPAs…”.


Indian Parliament – Upper House, Rajya Sabha

The 18th of July saw State Banks (Repeal & Amendment) Bill 2017, placed and passed by the upper house of the Indian Parliament- Rajya Sabha. Only 7 Parliamentarians participated in the discussion.

Mr Jairam Ramesh, belonging to the main opposition party- Congress, initiated the discussion. He seemed to be against this merger- “ Sir, I rise to speak on a Bill which has already become a reality. This is a Bill which provides for the merger of State Bank o Travancore, State Bank of Mysore, the State Bank of Hyderabad, the State Bank of Patiala and the State Bank of Bikaner and Jaipur into State Bank of India. The merger already took place on the 1st of April 2017. These associated banks have creased to exist. However, we are discussing …”. He went on to caution-“ ..The loss incurred by the small banks taken over by the State Bank of India which will result in accumulation of hue debts. Ultimately, it pushes the SBI to go for abnormal haircut that paves the way for more financial stress to the SBI”. However, despite reservations, at the end, Mr Jairam welcomed the Bill.

Mr. Sukhendu Sekhar Ray expressed his reservation-“ ..my merging so many public sector banks is detrimental to the interest of the depositors…”. Mr Harivansh stressed the need to change work culture of banks. He supported the merger. Mr Anil Desai supported the Bill. Mr. Madhusudan Mistry asked the Minister for reasons for the merger. Dr Anil Agrawal felt that of all the banks working in ‘Hindustan’, best working is that of SBI. “The small banks that will be merged will follow it (SBI working) and will improve their working” . He gave an example of river Ganga and its tributaries- “..smaller rivers merging in Ganga also become holy, become Ganga”. Mr K.K Ragesh stated the facts-“..we did not get any opportunity to discuss the pros and cons of merger that has already taken place”. He asked for the reason for merger. At length, he elaborated the NPA crisis in SBI- NPA of 1.89 lakh crores, 90 percent was by corporate, big business companies- not poor people. He asked for accountability for NPA-“ ..You have to penalize then. But unfortunately, even the SBI is penalizing the poor by imposing a penalty on poor account holders who are not in a position to maintain monthly average balance..”.

At the end of the discussion, the Minister – Mr Shiv Pratap Sukla’s response was mostly irrelevant in response to the issues raised by other Members of Parliament on SBI Merger. However he did state the reasons for this merger- rationalization of assets, lower cost, high profits, reduction in securities so that people on larger scale get better interest rate”. The Minister underlined that that none of the members have objected to the Bill. He ended his speech-“..Today we all sitting here should accept this merger in national interest and pass this bill”. Indeed, the Bill was passed without any ruckus on the floor of the house.

Merger of Bhartiya Mahila Bank (BMB) with State Bank of India (SBI)

On the occasion of the 96th birth anniversary of former Indian Prime Minister Indira Gandhi, BMB was inaugurated by then Prime Minister Manmohan Singh on November 19, 2013  

The why did BMB lost its entity and was merged into the largest public sector bank in India? Government approved the proposal for merger of Bhartiya Mahila Bank (BMB) with SBI and the same has been notified in the Gazette of India on 20.03.2017. The merger has come into effect from 1st April, 2017. The Order dated March 20, 2017 issued by the Government of India was published under Extraordinary Part II-Section 3-Sub-section (i) in the Gazette of India sanctioning the acquisition of Bharatiya Mahila Bank Limited by State Bank of India in terms of sub section (2) of Section 35 of the State Bank of India Act, 1955 (23 of 1955).

Asit Ranjan Mishra informed that merger took place to ensure greater banking services outreach to more women at a faster pace. “The decision to merge BMB with SBI has been taken in view of the advantage of the large network of SBI among other things," the finance ministry said. “This merger will help SBI get paid capital worth Rs1,000 crore lying on the books of BMB," said Karthik Srinivasan, senior vice-president, Icra Ltd. Bharatiya Mahila Bank had a loan book worth Rs620 crore and deposit base worth Rs927 crore at the end of March 2016. (Mint.21 March 2017)

A question no 5690 was raised on 4/4/2017 in the Indian Parliament on Merger of BMB

The following members of Parliament - Chavan Shri Ashok Shankarrao;Gaikwad Dr. Sunil Baliram;Kirtikar Shri Gajanan Chandrakant;Mahato Shri Bidyut Baran;Patil ShriBheemrao Baswanthrao;Radhakrishnan Shri T.;S.R. Shri Vijay Kumar;Singh S
hri Kunwar Haribansh asked the following question to the Minister of Finance:

Question- Whether the Government proposes to merger of Bharatiya Mahila Bank (BMB) with State Bank of India (SBI) and if so, the details there of along with the aims and objectives thereto; (b) the number of branches of BMB functioning in the country at present, State/UT-wise; (c) the details of loans extended to the women entrepreneurs by BMB and the non-performing assets (NPA) has been reported by BMB till date; and (d) the time by which it is likely to be merged?

The Minister of State in the Ministry of Finance answered:

(a) to (d): The Cabinet in its meeting on 15th March, 2017 has approved the proposal of acquisition of Bharatiya Mahila Bank with State Bank of India. It has come into effect on 1st April, 2017. The merger is aimed at economies of scale and operational efficiency leading  to  improved  supervision  process,  compliance  and  productivity  in  addition  to  better  risk  management.  There  were  103 branches  of  Bharatiya  Mahila  Bank  functioning  in  the  county  as  on  31.03.2017.  Bharatiya  Mahila  Bank  had  extended  loans  ofRs.191.09 crore to women entrepreneurs till 31.03.2017 and the NPAs in BMB was Rs.5.25 crore.

BMB was no weak bank. BMB’s CASA increased to 23 per cent from 9.5 per cent in one year. The growth was highest compared to any other banks in the country. The bank’s NPA level was less than 0.25 per cent and it continued to report profit. Although initially meant as a bank exclusively for women, the bank allowed deposits to flow from everyone, but lending predominantly to women. Bhartiya Mahila Bank (Indian Women Bank)’s motto was “empowering women, empowering India”. In three years, BMB had 102 branches with client base of 3.5 lakh in one year, with around 70 per cent women. The bank has several women centric products like BMB Her Auto - Loan for women auto drivers, BMB Annapurna – Catering Service Loan, BMB Parvarish- Child Day Care Centre Loan and BMB Shringaar- Beauty Parlour Loan. This was in addition to women centric insurance products. Infact BMB Bank had offered collateral free loans of up to Rs one crore, covering the same under CGTMSE. BMB was the only bank India which offered catered dedicatedly to the niche of women centric products. In a patriachical mindset where financially independent women are still seen with suspicion, the, declared aim of merger is not clear.

The fact that BMB was charging lower interest rate from girl students in comparison to male students was not appreciated even a member of parliament.  Is encouraging girl students to study a ‘disparity’ that requires action by Government to remove it?

A question was raised in the Indian Parliament (Lok Sabha ) on 21.02.2014 by Mr. Manicka Tagore:

“Will the Minister of Finance be pleased to state:(a) the number as well as percentage of students who availed education loans from Bharatiya Mahila Bank (BMB) along with total loan amount sanctioned and disbursed during the current year, State-wise including Tamil Nadu; (b) the present rate of interest being charged by BMB on education loan in the country; (c) whether instances of BMB charging lower interest rate from girl students in comparison to male students have come to the notice of the Government; (d) if so, the details thereof and the reasons there for along with the steps taken by the Government to remove this disparity; and (e) whether the BMB has any proposal to grant loans to women self help groups in the country and if so, the details thereof ?

Answer: The Minister of Finance (Mr P. Chidambaram (a)to (e): A Statement is laid on the Table of the House Statement referred to in reply to parts (a) to (e) of Lok Sabha Starred Question No. 413 for answer on 21st February, 2014 tabled by Shri Manicka Tagore regarding 'Bhartiya Mahila Bank'. (a) Bhartiya Mahila Bank (BMB) opened on 19th November, 2013 has so far sanctioned 3 numbers of education loans for a total amount of Rs 29.19 lakh i.e. one each in Delhi NCR, Madhya Pradesh & Maharashtra out of which the education loan in Maharashtra amounting to Rs 10.24 lakh has been disbursed. (b)to (d) The present rate of interest being charged by BMB on education loan in the country is as under: Amount #Interest Rate Charged P.A. Upto 4.00 Lac 12.50% Above 4.00 lac and upto 7.50 lac  13.00%Above 7.50 Lac 12.75%#1% concession given to female students. Girl students are given a concession of 1% by BMB in terms of its guidelines to encourage education among girls students. (e) Yes, BMB has three proposals to grant loans to Women Self Help Groups in the country. These are (i) Financing to SHG in Maharashtra through (a) Kalanjiam Development Financial Services (KDFS) to benefit 48750 women; and (b) Mahila Aarthik Vikash Mahamandal  (MAVIM) that  would  benefit  400  women;  and (ii)  Financing  to  Self  Help  Group(SHG)/Joint  Liability Group (JLG) inLucknow, U.P. through Bhartiya Micro Credit (BMC) would be benefitting 3000 women”.

Another question was raised on - ‘Proposed merger of Bhartiya Mahila Bank with SBI’ in Lok Sabha on 9 August 2016 by Mr Ali Anwar Ansari, He pleaded –“…There is only one women centric bank in India- atleast, please spare this”. Six other members of Parliament associated themselves with the Zero Hour mention made by Mr Ansari. Incidentally, out of these 6 members of Parliament, only Ms Renuka Chawdhury was the lone women member. What stopped other women members of Lok Sabha in associating themselves with survival of BMB?

Extra Careful

A date of the Members of a Parliamentary Committee with top executives of public sector banks raised concerns about merger. Economic Times reported that according to sources, the issue of merger of banks also came up at the meeting with some members suggesting the need to be extra careful as it involved "different cultures" besides "chemistry". They said the proposal of merger of different banks was not the same as merger of associates of State Bank of India. (4/6/2018). The concern of parliamentary panel is justified but it seems lessons have not been learnt from SBI merger which was no small change, involving integrating the role and services of around 70,000 staff and 7,000 branches & last but not the least the lives of main street account holders.

Unfortunately, no serious efforts seem to have been made to be -“Extra careful”.

It is very sad that no serious attempt have been made to change the ‘chalta hai culture’ & subsequent behavior of employees that has led to creation of NPAs

The former Federal Reserve chairman, Alan Greenspan, had conceded that the global financial crisis has exposed a "mistake" in the free market ideology which guided his 18-year stewardship of US monetary policy. Unfortunately, no ‘Indian Greenspans’ in India has conceded their mistakes for the NPA crisis in India. The pertinent question is- what was RBI doing when public sector banks were indiscriminately lending to high risk infrastructure sector and others, without due diligence? Is high risk lending a feature of complex economy? What was RBI doing when banks were hiding NPAs from their balance sheet by so called restructuring- lending then even more!  And this tradition of restructuring has not stopped. Total loans subjected to restructuring & corporate debt restructuring during 2019 by public sector banks was Rs 228 billion

ME UNDER ATTACK last 3 years

My latest book (The Smell of NPA) that is related to the  problem of organisational culture which has plagued the Indian public sector banks and has lead to formation of Non performing Assets (NPAs) has made lots of enemies. Let me state that  during writing this book I have suffered a lot including my mother as the truth in this book has not been very pleasant to the political class in India as all major political parties have been responsible for the mess they have created (read- Congress party (I) lead by Sonia gandhi, Rahul Gandhi and BJP (lead by Narendra Modi). They have created mockory of governance against me since 2016 (time during I starting writing my book on Non performing assets in public sector banks in India) and also starting seeking information under Right to Information Act 2005 from various Ministries of the Government of India, Banks and Reserve Bank of India. I have eleborated the threats in the forward of the preface of the book, which has got worse after I sent copy of my book to Prof J. C Shapiro at London School of Economics & Political Science.

Since I emailed  (21 July 2021) to the Minister at PMO _ Mr Jitendra Singh, copy to Senior Advisor (Mr P.K Mishra) to the Indian Prime Minister regarding the delay in issurance of death certificate of my late father0 Mr Chandra Kumar Sharma (died on 8 August 2020), I have been subjected to worse conditions than a prisoner would have felt in a prisoner in a jail where human rights abuse is the norm- so much tall talk about life with dignity. Of course human rights record of the Indian government is so pathetic that Right wing  PM of India - Mr Narandra Modi was accused of inciting communal violence in Gujarat when he was the chief Minister of the State of Gujarat and consequently was refused even Visa by America, given his human rights record. However, the same Americans seem to have lost their way, as they are supporting the same Narendra Modi. WHY ABUSE ME AS WIFE OF SERGE BRIN, LARRY PAGE - NIRMALA s? No response from larry pages to my email - shame on hostile staff at googlr HQ Gurgaon. under spell of modi and he roaming around  in front of my home with many women specially Praggya DAS, who is 65 yr women from reserve bank of india. their pronographic attack on loudspeaker is worst form i have faced. such humiliationm with nirmala suraraman calling me pragya brin on delhi metro train and later abusive words with others.

It is a curse to be honest  founder and editor in chief of sarcajc and write  about the welfare of the mainstreet rather self. The cost is so high that it makes me wonder why did I return to India anyway- being a patriot, non crony, non political minded person has no support by only enemies and that to real ones. I remember myself talking to Queen Elizabeth -II during her visit toi New Delhi a decade ago, she was wearing such a beautful pink colour dress with matching lipgloss at the British Council and her ADC. They were curious to know why there is so much corrpution in India, and I had a long chat with the ADC and he was rather surprised to note that the values Indians had fought for and so many unknown had perrished- have taken of the shelves by the brown sahibs (read in the name of self reliance/self govervance). Infact many vetern freedom fighters (read revolutionaries vis s vis moderate Congress ugly faced liberals) felt that the British Era was far much better than after independence. I wonder why Indians celebrate independence day, independence from what- values, ethics or self? It is a pity that being a founder of a Journalism Research Centre all I can do is not to fully expose the corruption of the political class that manifests in various forms as am vulnerable to a great amount of risk (read- no whistle blower Act, no governance, non existent judiciary). I wish I would have been in London to pay homage to Late Queen Elizabeth-II. I remember now the words of Prof David Marsden that I should have inspired to become the Indian Prime Minister if not a member a political party in United Kingdom. He wanted to become PM of United Kingdom as a tutor was encouraing me to take interest in politics, which I that time thought was not my aim. I wonder if Prof Marsden would have been alive he would have instructed me to take the next flight to England and write my memoirs on the slaveland India. But only if I would have survived, as it seems at present there are remote chances of my being able to escape the slaveland India with so many threats looming around - determined to take revenge of exposing the collapsed Indian Banking system in India which has been covered by by writeoffs and corruption scandals of the disguisting Indian politicians, bankers and journalist link . Surely, this can happen only in India,

NON PERFORMING ASSETS IN INDIAN BANKS- MY UNPUBLISHED BOOK

Extracts 

Preface: Broken the Basic Rules of City

“..City is a funny place...if you spill the beans you’ll open a can of worms..”
(Sir Desmond Glazebrook to Prime Minister, ‘Yes Prime Minister’ 23 December 1987)

The 1980s saw telecast of ‘Yes Prime Minister’ by BBC in series, a political satire that threw light at the inner working of the central government. The lead character- Mr Jim Hacker, is the Prime Minister, who incidentally received his degree from London School of Economics, which happens to my school too! However, here I am, thinking about the welfare of mainstreet with the “luxury of conscience’ and writing and ‘taking on the city and chaps’! “That’s no irregularity but malpractice” - Sir Humphrey Appleby would probably acclaim! Taking a clue, should we assume that as the welfare of mainstreet is hands of ‘smart’ and ‘bright’ ‘chaps’, so all is well in the city? So what if International Monetary Fund and World Bank were not able to predict global financial crisis of 2008. Of course, ’chaps’ in these premier lighthouses as well as in ‘beam bulbs’ are really ‘smart’ and ‘bright’ and can be trusted for eternity! These crisis were simply some ink spill from the next door market failure, a salient characteristics of welfare policies for the media to hogl!.

However, you could turn around and ask-do  zombie complex economic models, have any real value, other than landing in an academically acclaimed journal, higher post or in rare to rare case-getting a Nobel Prize? It has been said that mathematical method is like the map of a kingdom or the world; the pedestrian who attempted to guide his steps by such a chart would be, not only a wayfaring man. But a fool. Seemingly, spreadsheet obsessive ‘chap’ trips on a rollercoaster rather studiously, sails through regressive equations to serve the thyself! Of course, ‘chaps’ are humans. The element of ‘greed’ has the power to supersede all homogenous conditions of that financial model. Robert Frank might probably point that  “Psychologists sometimes describe economists who pose such questions as having high I.Q. but no clue”!.

It seems the best definition of Greed was given by Gordon Gekko in Oliver Stone’s movie- Wall Street, which was inspired by speech by Ivan Boesky, who was 18 months later involved in an insider trading scandal.
 “The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms, greed for life, for money, for love, knowledge, has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA”.

The Movie- Wall street was a success, but what is intruding that Gordon Gekko, though a villain inspired so many people to take a plunge in finance. Stanley Weiser, the co-writer of the screenplay, met many of these young people was not happy in 2008.

“ I wish I could go back and rewrite the greed line to this: ‘Greed is good. But I’ve never seen a Brinks truck pull up to a cemetery.’(Stanley Weiser, 5/10/ 2008)

The Gekko promoted greed brought in focus the human element that led to global financial crisis. A lot of research has been conducted since in the developed world. Compared to the developed countries, India was indeed fortunate that it did not get adversely affected by the global financial meltdown, though voices claiming recessions in India were still heard in India.

During a conference- “Challenges of Growth, Employment and Social Cohesion” at Oslo on 14/9/2010, I asked the IMF Managing Director–Mr. Dominique Strauss-Kahn a simple question- “Is greed good”. He laughed & gave a short reply- “This calls for long answers” and left. His associates laughed too, while I stood freezed. During the same conference- I asked the ILO’s Adjoint Director – Dr Philipee Egger about Greed and why lead policy makers failed to see the global crisis coming, he did not mince words- “ from 2004 ILO officially saying this Globalisation is politically, socially and economically unsustainable. 2008- Lehman Brothers..We were among the voices saying careful this is going the wrong way..but everybody was disillusioned by robust numbers…GDP number.. is not the wealth that improves situation of the poor. All the people in India and all the people in the world do not benefit from fact few billionaires add billions to already considerable wealth…once inequality grows up its very difficult to bring it down..”.

Since then, I have been conducting a random anonymous survey of 300,000 respondents across India and asked them the same simple question- “Is greed good?”.Overwhelming majority - 87 per cent felt that greed was not good. 3 percent respondents refused to comment at all. Incidentally, 10 percent who felt greed was good belonged to the financial and realty sector! On being asked who should primarily be responsible for controlling greed, 95 percent answered- “the Government”.
The difficulty, according to Professor Mashall might have said- “the element of time”..where a person satisfies one of his wants by his own direct action, as, for instance, when he picks up blackberries” up to a point- “the task picking begins to cause weariness, which at last counterbalances the desire of eating, and equilibrium is reached”. He might add- “What is wanted is a general principle which shall determine the point in the widening of the scope of economists at which the growing loss of scientific precision would begin to outweigh the gain of increasing reality and philosophic completeness”. It’s easy to get into philosophical dogmas like ideas, after releasing, one doesn’t really know for certain how long they will fly. Assumptions are numerous, complex economic models play narratives on the spread-sheets, though apparent error is not significant until the balloons come crashing down.

Not surprising, Gordon Brown, had listed Iceland on a list of terrorism. Geir Haarde, Iceland's then prime minister, later said: "The actions of the Brown government were shameful. They put a friendly country like Iceland on a list ... alongside al Qaeda.”A special prosecutor in Iceland had issued indictments against the chief executives and 14 other employees of two banks that saw a spectacular collapse during the financial crisis of 2008. However, the political party in power that was responsible for the financial mess was able to get elected back to power in Iceland, and the left oriented party under which the Icelandic economy had recovered, lost. The politicians responsible for the crisis were not prosecuted.

Do we have to enter the sphere of politics to decode the economic puzzle, so evenly spread out across the global hemisphere? Henry Sidgwick would probably reiterate that politics and political economy have more than a name in common and that politics include- “The Art of Political Economy” and that “abstract theory shows several cases in which the individual’s interests does not tend in the direction most conducive to the common interest – even assuming that utility to society is accurately measured by market value”. According to him, the end of politics is the greatest quantity, not of wealth but of happiness. Here, J.S Mill might reflect his thoughts on the notion of equality- “the equal claim of everybody to all the means of happiness”. Betham would state pathological propositions upon the good of equality is founded” viz. That ceteris paribus “each portion of wealth has as corresponding to it a portion” or rather a “certain chance” of happiness” and “the excess in happiness of the richer will not be so great as the excess of his wealth”.  

In case of a financial system, the marginal utility is decided by the main street, which ultimately gets reflected in the election results. The elections are like sacred water that comes to bay, regularly, and the value of utility of the drinking vessels is decided by the voters. No doubt, the vessels are the various political parties that attract them with enticing designs. George Washington had issued a warning about political parties more than 200 years ago, saying they were destructive and could divide the country. Professor Bastable would argue- “an escape from the difficult questions that the problem of justice must always present is a pleasing prospect, though unfortunately based on an illusion”. (Essays, Speeches, Addresses and Writings, (Bombay: Caxton Printing Works, 1887), pp. 131-136. When politics takes over economics, rationality loses ground.

In a foreword to The Road to Serfdom, John Chamberlain, book editor of Harper’s, wrote: “This book is a warning cry in a time of hesitation. It says to us: Stop, look and listen. Its logic is incontestable, and it should have the widest possible audience”.

Fisher:  I share all your worries and concerns as expressed in The Road to Serfdom and I’m going to go into politics and put it all right.

Hayek:  No you’re not! Society’s course will be changed only by a change in ideas. First you must reach the intellectuals, the teachers and writers, with reasoned argument. It will be their influence on society which will prevail, and the politicians will follow.

Does freedom of collective expression weighs more than individuality knowledge? Even the best of idea by an individual needs protection in the so called jungle of free market where the ‘second hand idea’ makers leave no stone unturned to misinterpret the ‘first rate idea’. Is this one of the reasons, if not the only, that economists at the helm of power don’t bother to raise an alarm, despite despairing signals of a crisis. Does this imply that there is a competition between the politicians and the others regarding who is a better serf, the guide of “Second hand ideas”? Who controls whom?

According to Hayek, the difficulty of finding genuine and disinterested support for a systematic policy for freedom is not new. In 1936 Keynes had concluded his most famous book, The General Theory of Employment,Interest and Money, with these words:

…the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist…Soon or late, it is ideas, not vested interests, which are dangerous for good or evil.

And this was the first time the world saw President Roosevelt coming in favour of the main street. He had begun his inauguration address in 1933 by blaming the economic crisis on bankers and financiers, the quest for profit, and the self-interest basis of capitalism:

“Primarily this is because rulers of the exchange of mankind's goods have failed through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men. True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence....The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit”.
President Roosevelt was making this disclosure in the middle of a bank panic, which is evident by these words- “The only thing we have to fear is fear itself”.  The very next day he declared a "bank holiday" and called for a special session of Congress to start March 9, at which the Congress passed the Emergency Banking Act. This was his first proposed step to recovery so as to provide Americans confidence in the banks; Roosevelt signed the Glass- Steagall Act that created the Federal Deposit Insurance Corporation (FDIC).

Roosevelt saw the New Deal policies as central to his legacy, and in his 1944 State of the Union of Address, he advocated that Americans should think of basic economic rights as a Second Bill of Rights. Today, the legacy of President Roosevelt holds roots in the light of the on-going financial crisis in the world, thanks to the pioneers of Wall Street. President Barack Obama showed solidarity with the pain left by the main street, displayed during the protest against the Wall Street- "It expresses the frustrations that the American people feel that we had the biggest financial crisis since the Great Depression, huge collateral damage all throughout the country, all across Main Street....And yet you're still seeing some of the same folks who acted irresponsibly trying to fight efforts to crack down on abusive practices that got us into this problem in the first place." (Obama: Wall St. protests expresses public’s anger (07/10/2011)The Seattle Times)It seems the battle had just begun. "We are the 99 percent”.
It seems, the world is a jungle and we all have a role to play here, that too without any melodramatic efforts of self-sacrifice of individual entity. The Needs theory will not be able to explain why Lion is the King while big giant Elephant is not. And while leopard is seen happy even among vegetarian animals, without hunting them down. Remember- in the story of “The Jungle and the Town”- envy, greed and scandal live together. All one has to do is to identify the citizens of this jungle and vote for them with prudence. Not getting swept away, only by aura of the election riders on the slogan of democracy is not seen as legitimate proof of the dedication and sincerely of the system which is democracy, read – jungle.

Nearly after a decade since the world financial crisis, India is reeling under worst financial crisis with Non Performing Assets (NPAs) of public sector banks (government owned banks) spirally to unsustainable levels. What was more shocking that in a speech in parliament, Prime Minister of India, Mr. Narendra Modi revealed- “ Till the time you were in power you (Congress party) lied and said the NPAs were 36% but in 2014 (the year the BJP came to power) we started seeking the truth and looked at the documents. We realised that you gave wrong statistics. NPAs were at 82%,”  He went on to say that total advances by banks climbed to Rs 52 lakh crore in March 2014 – as part of the UPA government’s bad debt. “This was the money of India’s poor.” (7/2/2018).Later, many in media wondered the source of this distressing statistics. But there was no doubt that the Indian public sector banks had indeed failed and the Indian Government led by Prime Minister Mr Narandra Modi was forced to poured capital save them from ‘officially’ failing. Desmond Glazebroook would grin and shoot a cliché- “Chaps needed bail-out financed by tax payers money, possibly to rule-out a panic reaction and restore confidence in economy. So what’s the big deal!”.

What’s has been the role of the Reserve Bank of India (RBI), the Indian Fed, and the regulator? Read on.

The year 2019 will be known as the year of mergers of Indian public sector banks. State Bank of India, the largest public sector bank was merged with five associated banks and Bhartiya Mahila Bank. This was followed by more bank mergers. The net result is the reduction in the number of public sector banks from 27 to 12. But what is the gain? Is merger solution to problem of NPA crisis of Indian public sector Banks? What are the lessons from the recent mega merger of largest public sector bank in India- State bank of India with its associated banks and Bhartiya Mahila Bank? What is the role of the regulator- Reserve Bank of India (RBI)? The following chapters will attempt to explore these issues, with special emphasis on Organisational Behaviour, Industrial Psychology and HRM.

And yes, during last three years during my research, I have encountered hostile reactions to my research efforts from many. I & my family had to encounter personal threats and harassments. But, I guess, LSE had trained me to seek answers to questions, without any fear. When asked about the reasons for rise in NPAs, one of senior Bank manager had the audacity to hurdle abuse- “Are you Nirav Modi or Vijay Mallaya (2 kingpin of NPAs), you cannot never become like them in your next 12 births!” One of the CEO of a public sector bank praised ‘Lalit Modi’ (a fugitive, now) as the greatest entrepreneur India has ever seen. Incidentally, this ‘lame duck’ CEO is known for keeping silence when NPAs kept rising in that bank.”I don’t stop others from indulging in any practice they might like, but I don’t indulge in any such practice!”.So what his mediocre son from B grade Business School has risen to post of AVP in another bank- rather quick, and in future might become CEO too! Now, that’s very saintly, isn’t it?

And yes, during last five years during my research, I have encountered hostile reactions to my research efforts from many. I & my family had to encounter personal threats and harassments. But, I guess, LSE had trained me to seek answers to questions, without any fear. When asked about the reasons for rise in NPAs, one of senior Bank manager had the audacity to hurdle abuse- “Are you Nirav Modi or Vijay Mallaya (2 kingpin of NPAs), you cannot never become like them in your next 12 births!” One of the CEO of a public sector bank praised ‘Lalit Modi’ (a fugitive, now) as the greatest entrepreneur India has ever seen. Incidentally, this ‘lame duck’ CEO is known for keeping silence when NPAs kept rising in that bank.”I don’t stop others from indulging in any practice they might like, but I don’t indulge in any such practice!”.So what his mediocre son from B grade Business School has risen to post of AVP in another bank- rather quick, and in future might become CEO too! Now, that’s very saintly, isn’t it? I had regular fights at various banks even when I went to get my passbook updated or getting cash withdrawal from my own account. Is it a crime to view  and take pictures as evidence of loads of cash in trunks getting away from two leading public sector banks in time of acute shortage of cash during demonitisation drive in the year 2016? Not to forget the assasination attempts on my by running me down by cars, constant break failure of my car, my father's car, shit and run attenpts, chasing and abusing me and issuing me most vulgur threats on roads even in front of my house and in my own house. Not to forget the most obsense phone call I received from PNB Bank Manager.

 Since initiation of my research on NPA, I have face harassment of worst kind since 2017 only because the Indian government and politicians, NPA creators had became aware of my research study on the NPA mess and associated linkages to their own role as I was seeking information under Right to Information from various public sector banks and Reserve Bank of India. There is no whistle blower protection Act in India to protect me and my old mother, ex Professor from Delhi Univerisity, as often the judiciary is vulnerable to the whims of the Indian NPA creators. My website- www.sarcajc.com - South Asian Research centre for Advertisement Journalism and Cartoons has been functional since 2006 and has stood up in favour of mainstreet, transparancy and accounability of the government of India as well as the mainstream Indian Media - which has not been liked by them. So, they has have taken harasement route of the worst kind to abuse me, my parents in various direct and indirect ways. My mother has become weak in her mental agillity due to contionus harassment on her by electronic means in my own house. I fear for my life and my mother's life.And yes, during last five years during my research, I have encountered hostile reactions to my research efforts from many. I & my family had to encounter personal threats and harassments. But, I guess, LSE had trained me to seek answers to questions, without any fear. When asked about the reasons for rise in NPAs, one of senior Bank manager had the audacity to hurdle abuse- “Are you Nirav Modi or Vijay Mallaya (2 kingpin of NPAs), you cannot never become like them in your next 12 births!” One of the CEO of a public sector bank praised ‘Lalit Modi’ (a fugitive, now) as the greatest entrepreneur India has ever seen. Incidentally, this ‘lame duck’ CEO is known for keeping silence when NPAs kept rising in that bank.”I don’t stop others from indulging in any practice they might like, but I don’t indulge in any such practice!”.So what his mediocre son from B grade Business School has risen to post of AVP in another bank- rather quick, and in future might become CEO too! Now, that’s very saintly, isn’t it? I had regular fights at various banks even when I went to get my passbook updated or getting cash withdrawal from my own account. Is it a crime to view  and take pictures as evidence of loads of cash in trunks getting away from two leading public sector banks in time of acute shortage of cash during demonitisation drive in the year 2016? Not to forget the assasination attempts on my by running me down by cars, constant break failure of my car, my father's car, shit and run attenpts, chasing and abusing me and issuing me most vulgur threats on roads even in front of my house and in my own house. Not to forget the most obsense phone call I received from PNB Bank Manager.

 Since initiation of my research on NPA, I have face harassment of worst kind since 2017 only because the Indian government and politicians, NPA creators had became aware of my research study on the NPA mess and associated linkages to their own role as I was seeking information under Right to Information from various public sector banks and Reserve Bank of India. There is no whistle blower protection Act in India to protect me and my old mother, ex Professor from Delhi Univerisity, as often the judiciary is vulnerable to the whims of the Indian NPA creators. My website- www.sarcajc.com - South Asian Research centre for Advertisement Journalism and Cartoons has been functional since 2006 and has stood up in favour of mainstreet, transparancy and accounability of the government of India as well as the mainstream Indian Media - which has NOT been liked by them. So, they has have taken harasement route of the worst kind to abuse me.  I fear for my life and my mother's life.

Strengthening Democracy, Governance & Accountability

A WORLD WITHOUT ANY SPYING ON me

Type your paragraph here.

Is menace of NPA new to India?
Who is to be blamed for this mess in Public sector banks?  The Indian parliament saw no ‘White Paper’ over this mess. NPA was not even picked up by any political parties as a dominating election issue in India. Unlike, Wall Street protest, here the victims - depositors, taxpayers did not take to streets to protest