Finance Secretary dispels fears of job losses after merger of 10 PSU banks

New Delhi: The merger of 10 public sector banks (PSBs) to form four big lenders will create more jobs and not lead to any retrenchment as being claimed by some trade unions, Finance Secretary Rajiv Kumar has said.

"When the size of a bank becomes big, then its business will also grow, resulting in more job creation. There is no question of retrenchment," he told ANI in an exclusive interview.

"Look at the past example of mergers with State Bank of India. See the example of three banks merging with Bank of Baroda. There was no retrenchment. This is an issue of providing better facilities to bank employees," said Kumar.

The merger of PSBs is imperative for India to become a five trillion dollar economy in the next five years. "You have to adopt a banking system which is clean and impactful. In 2017, there were 27 PSBs. Now we have only 12."

Kumar said there will be three types of banks in future: PSBs with a strong national presence and global reach, PSBs with a national presence and PSBs with a regional presence. After the merger, PSBs can do investments, cut expenditure and increase facilities for customers. The merger will benefit customers in tier 2 and tier 3 cities, he added.

Kumar said the merger will benefits employees working in small banks. Besides, they will have more opportunities for transfers. For example, the merger of Indian Bank and Allahabad Bank will give opportunities to employees to move from North to South, or the other way round.

"If there is any problem, then the government is there for solutions," he said.