Mangaluru: Union Finance Minister Nirmala Sitharaman’s announcement on Friday, August 30, that 27 nationalised banks will be merged to form 12 banks, has cast a pall of gloom over the coastal districts of Karnataka. This news comes especially hard for undivided Dakshina Kannada, as this region is known as the “cradle of banking”.
As many as five banks were started in undivided Dakshina Kannada and the Finance Minister’s latest announcement will spell the end for four of the nationalised banks, which will lose their identity once they are merged.
While Vijaya Bank has already been merged with Bank of Baroda along with Dena Bank, the remaining three nationalised banks- Canara Bank, Syndicate Bank and Corporation Bank will be merged soon. Only Karnataka Bank, being a private scheduled bank, has escaped the merger bid.
The five banks have been flourishing on this soil all this while, a testament to the culture of saving of the coastal region’s people.
Now, the sudden announcement of mergers has come as a rude shock to the region, especially when each of these banks has been registering huge profits.
Origins
Corporation Bank and Canara Bank were the first to be born in the region, the former in Udupi and the latter in Mangaluru.
Corporation Bank was founded by Khan Bahadur Haji Abdullah Haji Kassim Bahadur Saheb as “The Canara Banking Corporation (Udupi) Limited” on March 12, 1906, as a move towards “Swadeshism”. It got its present name in 1972 and was nationalised in 1980.
Ammembala Subba Rao Pai founded the Canara Bank Hindu Permanent Fund in Mangaluru on July 1, 1906. Pai would collect a handful of rice from each household, pool the rice, sell it and use the money earned for the bank’s capital. From this humble beginning, the Canara Bank now has 2,542 branches in India. Its name was changed to Canara Bank Limited in 1910 and was nationalised in 1969.
Syndicate Bank was established in Udupi in 1925 under the name “Canara Industrial and Banking Syndicate Limited” by three people- Upendra Pai, Vaman Kudva and Dr T M A Pai, with a capital of Rs 8,000. The objective was to give a boost to the local handloom industry. In 1963 it got its present name, Syndicate Bank and was nationalised in 1969.
Vijaya Bank, the first of our banks to be merged by the Prime Minister Narendra Modi-led BJP government, was established on October 23, 1931 in Mangaluru by A B Shetty, primarily to help the farming community. The bank, whose name was derived from Vijaya Dashami (last day of Navarathri), was nationalised in 1980. It was merged with Bank of Baroda, along with Dena Bank in April 2019.
‘Profit-making banks of south India are gone’
The Finance Minister’s announcement of the merger is being questioned on two specific lines. The first being the motive behind merging these banks and the second being a perceived invasion by the north Indian banks.
Senior journalist Preethi Nagaraj said that recently, Vijaya Bank, a profit-making entity, was merged with Bank of Baroda and Dena Bank, both loss-making entities. Vijaya Bank lost its identity in the merger. “We all know that the south Indian banks are doing well, while the banks from the north are bleeding. Yet, history is going to repeat itself with the remaining three banks of the district,” she added.
CA Valerian Dalmaida opined that there is a conspiracy to wipe out the south Indian contribution and legacy. “All profit-making banks of coastal Karnataka are gone. The names of Mulky Sunder Ram Shetty, Khan Bahadur and T M A Pai will never be remembered, once the banks for which they worked relentlessly are merged. Why can’t Corporation Bank be the Anchoring Bank, why does it have to be merged with Union Bank, which was started in Mumbai? Forget about people losing their jobs because of the mergers, undivided Dakshina Kannada is losing the glorious title of ‘cradle of banks’. Should we keep quiet or raise our voice? What about our elected representatives to the Lok Sabha and Assembly. Are they even concerned?” he asked.
He then suggested that, as a form of protest, the people of undivided Dakshina Kannada should withdraw their deposits from the PSU banks which are to be merged and deposit in other private banks founded by people from the region.
Resistance
When the Vijaya Bank merger proposal came out, the bank’s employees staged several protests all over the country, but to no avail.
In light of the recent developments, the All India Bank Employees’ Association has called for massive demonstrations across the country, asking the protesters to wear black badges.
One will have to wait and see if these protests will mount pressure on the Central Government to rethink its decision.
