Hyderabad, Dec 15 (UNI) About 10 lakh bank employees and Officers will observe a nation-wide strike on December 26 in protest against the Union Government's decision to merge the Bank of Baroda, Dena Bank and Vijaya Bank into one Bank.

United Forum of Bank Unions (UFBU), an umbrella body of 9 bank unions-AIBEA,AIBOC,NCBE,AIBOA,BEFI,INBEF,INBOC,NOBW,NOBO- has given the strike call.

AIBEA General Secretary Ch Venkatachalam in a release on Saturday said, 'Merger of banks is unwarranted because it is not beneficial to the economy and people at large besides it will also affect the interests of employees, their jobs and job security and affect employment opportunities in Banks.'

'Compared to many countries of the world, banking density is relatively low in India and hence there is huge scope and need for expansion of banking industry. There is no need for consolidation. India needs expansion of banking sector to cover all sections of people, he added.

Talking about banking facility in the villages, Mr Venkatachalam said, 'there are thousands of villages where banks have not reached.'

Making comparison between India and USA banking system, he said, 'The number of banks in USA with just 323 million population is far more than banks in India with a population of 1.35 billion. Adding that India needs financial inclusion and merger will exclude small people from banking map as banking has not reached all people.

The AIBEA leader felt that the Central Government had launched Jan Dhan Yojana. Now, they have launched Jan Dhan Yoja II. This means we are yet to reach all sections of people. So, we need to expand banking services. Mergers will result in shrinkage of banking.

Stating that the country requires good banks and not big banks, Mr Venkatachalam said Mergers are proposed to make our Banks bigger to cater to increasing demands for large-sized loans.

Bigger the loan, higher the risk. Already Banks are suffering from big corporate defaults. Hence banks should not be made bigger by merging them, he said.

He said the Union Government argues that banks would become stronger by mergers. There is no evidence to this conclusion.

'Last year, a total of six banks were merged with SBI with this argument. But SBI has not become any bigger. Rather, problems of SBI have become bigger, he further added.

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Branches have been closed. Staff have become surplus. Business expansion has slowed down. NPAs have gone up. Thus banks will not automatically become big by merger of banks, he stated.

Mr Venkatachalam said 'Mergers are proposed so as to resolve the problems faced by the banks. Bad loans are the main problem facing the banks. Can anyone believe that merger will result in recovery of bad loans. Obviously not. After merger of the 6 banks with SBI, the NPA has further gone up to Rs. 2,25,000 crore. Hence it is also a wrong presumption.'

The AIBEA General Secretary said that to resolve the problem of bad loans facing the banks, government should take tough measures to recover the bad loans. Instead of that, the government is trying to divert the attention and focus by resorting to merger of banks which is unwarranted. In BOB, Dena Bank and Vijaya Bank, a total of NPA/Bad loan is Rs. 80,000 crore. Whether these bad loans will automatically be recovered if these Banks are merged?, he asked.

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