The United Forum of Mahabank Unions has written to the Department of Financial Services, under the Finance Ministry, to clarify if Bank of Maharashtra is among the banks to be privatised. The union went on to claim that the news of privatisation may hurt the bank as customers may start to withdraw deposits.
Union wrote the news around privatisation which is not been confirmed by the ministry is “creating confusion in the minds of the customers and it is every likelihood that based on this unauthenticated news customers of Bank of Maharashtra may withdraw their deposits and this is possible more particularly in the state of Maharashtra where Bank of Maharashtra has network of more than one thousand branches and more than half of its business comes from the state of Maharashtra.”
This withdrawal may take place as some customers of the bank are scared of private sector banks in view of failure of some of the private sector banks in the recent past. These customers prefer public sector banks over private banks.
The union urged the ministry to expedite the steps to put an end to rumours around privatisation. “Around 500 branches of Bank of Maharashtra are from rural areas of the state and most of the customers are financially illiterate, on the background this news may create panic. Hence, we urge upon you to please issue clarification on this behalf so as to create confidence with the customers of the bank who are scared and more particularly in view of the failures of some of the urban cooperative banks and NBFCs from the state,” the union wrote.
Meanwhile, the union also explains why Bank of Maharashtra should be out of the list of privatisation which Niti Aayog shared:
- Bank of Maharashtra has 1,122 branches in Maharashtra of which 762 branches are in rural and semi-urban areas. Thus privatisation may have adverse effect on the common man and farmers from Maharashtra.
- In the process, agriculture and allied activities, small and medium enterprises, small business, educated unemployed will be adversely affected.
- In the year 2020-21, 12 public sector Banks from the state of Maharashtra have sanctioned crop loan to 20.07 lakh farmers amounting to Rs 21,801.89 crore, while 14 private sector banks together have sanctioned crop loan to 2.06 lakh farmers amounting to Rs 4,869.74 crore.
- Out of these crop loans, Bank of Maharashtra’s share in farmers is 3.67 lakh that is 18.27 per cent while in amount it is Rs 4,865.81 crore that is 22.31 per cent which is more than what 14 private sector banks together have sanctioned, stated the union.
- Privatisation of Bank of Maharashtra is likely to adversely affect not only the common man but also the overall economy of the state since for all practical purposes this bank is a lifeline for the state.