New Delhi, Sept 4: The CPI-M today opposed government's decision to allow corporates to set up banks, saying it was a “completely irrational and retrograde” move that would cause “incalculable damage” to national economy.
The move not only completely reversed Indira Gandhi's bank nationalisation policy of 1969 but was also “fraught with serious consequences as it would push the banking sector towards a crisis and financial scams,” party General Secretary Prakash Karat said here.
Maintaining that CPI(M) strongly opposed these moves, he said it would ask all political parties, trade unions and mass organisations to oppose the government's decision that would cause “incalculable, harmful consequences” for the economy.
“In light of the global financial crisis sparked off in 2008 by the profligacy of banks and financial speculation, this is an irrational decision,” he said.
Before nationalisation, the big business used to exercise their control over banks “to divert bulk of the bank advances to large and medium-scale industries,” Karat said, adding that nationalisation had helped in expanding bank branches in rural and semi-urban areas and ensured credit flow to priority sectors like agriculture, small-scale industries and exports.
Even when licenses to private banks were issued in the post-liberalisation period, big business houses were prohibited from getting licenses, he said, adding that the government now “wants to abandon this long-standing policy.”
The CPI(M) leader said allowing industrial houses to own banks would enable them “corner bulk of the credit for their own businesses through connected lending”. PTI
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