Nirmala Sitharaman Counters Rahul Gandhi on Public Sector Banks
Rahul Gandhi’s Allegations Earlier, Rahul Gandhi accused the Modi government of using public sector banks (PSBs) as “an unlimited source of funds for their fraudulent friends.” He stated that PSBs, originally meant to provide credit access to every Indian, had been transformed into private financiers for wealthy corporations under the current administration. These allegations were made following Gandhi’s meeting with members of the All India Banking Officers Confederation, who expressed concerns about the state of PSBs and their impact on ordinary citizens.
Sitharaman Defends Banking Sector Performance In a swift response, Finance Minister Nirmala Sitharaman took to social media to defend the Modi government’s track record on PSBs. She detailed the improvements made in the banking sector since 2014 and criticized the Congress-led UPA government for its past mismanagement. Let’s break down her arguments under key areas.
1. Banking Reforms Under the Modi Government
Sitharaman highlighted significant reforms that strengthened the banking sector:
- Recapitalization of Banks: The government infused ₹3.26 lakh crore into PSBs over the last decade. This investment helped stabilize banks and improved their financial health.
- Asset Quality Review (AQR): Launched in 2015, the AQR exposed unethical “phone banking” practices during the UPA regime. This practice involved undue political influence on loan approvals, leading to a surge in non-performing assets (NPAs).
- Citizen-Centric Initiatives: Over 54 crore Jan Dhan accounts were opened, promoting financial inclusion. Additionally, schemes like PM MUDRA and Stand-Up India provided over 52 crore collateral-free loans, with 68% of beneficiaries being women.
2. Accusations Against the UPA Era
Sitharaman didn’t hold back in her criticism of the UPA government:
- PSBs as “Crony ATMs”: She alleged that PSBs were treated as ATMs for shady businessmen and political cronies during the UPA’s tenure.
- Loan Mismanagement: Bank employees were reportedly pressured into granting loans through political interference, damaging the banks’ financial stability.
- Neglect of Accountability: The Congress-led government’s failure to address rising NPAs left the banking sector in a precarious state.
3. Support for Bank Employees
Under the Modi government, Sitharaman noted, significant strides were made to enhance the welfare of PSB employees:
- Recruitment Drives: Since 2014, nearly 3.94 lakh employees have been recruited in PSBs. As of October 2024, 96.61% of officer posts and 96.67% of subordinate staff positions are filled.
- Wage Revisions: The 12th Bipartite Settlement led to a 17% increase in salaries and allowances for employees. Other benefits include improved medical insurance and enhanced staff welfare spending.
- Women-Centric Policies: Special leave provisions for women, such as menstrual leave and support for infertility treatments, were introduced to ensure a supportive work environment.
4. Impact of Reforms on Common Citizens
Sitharaman emphasized the government’s commitment to inclusive development:
- Financial Inclusion: Initiatives like Jan Dhan accounts and PM MUDRA loans have empowered millions, particularly women and marginalized groups.
- Strengthened Economy: A cleaner, stronger banking system has fostered investor confidence and contributed to India’s economic growth.
- Public Benefits: Dividends from PSBs have become a source of income for citizens who invest in them, reflecting a healthier financial ecosystem.
5. Countering Misinformation
Sitharaman accused Gandhi of misrepresenting facts about PSBs, calling his statements an insult to hardworking bank employees and beneficiaries of the reformed system. She reiterated that the Modi government’s policies prioritize accountability, transparency, and growth.
A Stronger Banking Sector While Rahul Gandhi’s allegations raise valid concerns about the role of PSBs, Sitharaman’s response highlights the extensive efforts made to reform and strengthen the sector. From addressing legacy issues like NPAs to empowering employees and promoting financial inclusion, the government’s initiatives reflect a citizen-centric approach. With these reforms, India’s banking sector is positioned to support sustainable economic growth.
