‘PSBs were UPA’s ATM for cronies’: Nirmala Sitharaman counters Rahul Gandhi’s allegations, credits PM Modi for banking sector turnaround

The finance minister said that during the tenure of the United Progressive Alliance (UPA), PSBs were mismanaged and treated as “ATMs for their cronies and shady businessmen.” She accused the previous government of fostering an environment where bank employees were pressured into granting loans through “phone banking,” a practice that led to a deterioration in the health of PSBs. “Didn’t the people who met with the LoP tell him that the Asset Quality Review was launched by our government in 2015, unearthing the ‘phone banking’ practices of the UPA government?” she asked.

Sitharaman detailed the financial support extended to PSBs, noting that the government had recapitalised them with ₹3.26 lakh crore over the last decade. She argued that this investment not only benefits the banks but also the public, as dividends from PSBs serve as a source of income for investors.

“Citizen-centric governance and inclusive development is the core principle of the Modi government.  This commitment is reflected in the establishment of 54 crore Jan Dhan accounts and the sanctioning of over 52 crore collateral-free loans under various flagship financial inclusion schemes, including PM MUDRA and Stand-Up India,” she said, stressing that these initiatives had significantly benefited women, with 68% of PM MUDRA beneficiaries being female.

Leader of the Opposition (LoP) @RahulGandhi की बेबुनियाद बयानबाज़ी फिर से सामने आ गई है। भारत के बैंकिंग क्षेत्र, ख़ासकर पब्लिक सेक्टर बैंकों (PSBs) में, माननीय प्रधानमंत्री श्री नरेन्द्र मोदी के नेतृत्व में अभूतपूर्व सुधार हुए हैं।

क्या विपक्ष के नेता से मिलने वालों ने उन्हें… https://t.co/5QUzsQlnle

— Nirmala Sitharaman Office (@nsitharamanoffc) December 11, 2024

On the issue of recruitment drives in the banking sector, she said that since 2014, PSBs had recruited nearly 3.94 lakh employees and as of October 2024, 96.61% of officers and 96.67% of subordinate staff were in position.

Sitharaman said that the 12th Bipartite Settlement, signed ahead of schedule, had led to a 17% increase in salaries and allowances for bank employees. She detailed various employee-friendly measures included in the settlement, such as revised medical insurance policies and increased spending ceilings for staff welfare.

Referencing a recent directive from the Department of Financial Services that ensures special leave provisions for women employees, addressing issues such as menstrual leave and infertility treatment, she commended the government’s commitment to women’s development within the banking sector.

She accused Gandhi of misrepresenting facts, calling it an “insult to the hardworking PSB employees and to the citizens who benefit from a cleaner, stronger banking system.”

What Rahul Gandhi said?

Earlier in the day, Rahul Gandhi, in a tweet, said, “Public Sector Banks were designed to give every Indian access to credit. The Modi government has turned these lifelines of the masses into private financiers for only the rich and powerful corporations.” He said he had met with a delegation from the All India Banking Officers Confederation, who expressed their distress at the state of public sector banks and their impact on common people.

Leader of the Opposition (LoP) @RahulGandhi की बेबुनियाद बयानबाज़ी फिर से सामने आ गई है। भारत के बैंकिंग क्षेत्र, ख़ासकर पब्लिक सेक्टर बैंकों (PSBs) में, माननीय प्रधानमंत्री श्री नरेन्द्र मोदी के नेतृत्व में अभूतपूर्व सुधार हुए हैं।

क्या विपक्ष के नेता से मिलने वालों ने उन्हें… https://t.co/5QUzsQlnle

— Nirmala Sitharaman Office (@nsitharamanoffc) December 11, 2024

Gandhi raised several concerns:

• Profit Over People: Public Sector Banks are being forced to prioritize profit over people and are thus unable to serve the public effectively.
• Staff Shortages: With staff shortages and a toxic work environment, they are expected to reach unachievable targets without a level playing field.
• Gender Inequality: Women employees are not given equal opportunity or advancement and are forced to bear the brunt of dissatisfied public.

He urged the Modi government to stop using PSBs as “an unlimited source of funds for their fraudulent friends. There’s also more to a public sector bank than a dividend cheque to the govt at the end of the year.”