People's Democracy

AIRBEA To Launch Nationwide Campaign Against Outsourcing

THE campaign of United Forum of Reserve Bank officers & employees against outsourcing of RBI jobs and functions is gaining momentum. The Forum has been organising state level seminars and conventions where eminent economists, trade unions leaders and leaders of political parties have been speaking emphatically supporting the issues of national importance raised by the RBI workforce.

The convention at Kolkata was held on November 09, 2006 amidst great enthusiasm. Although the original open-air venue had to be shifted due to inclement weather, it could not dampen the spirit of more than 1200 participants including a good number from other banks. Chief minister of Tripura Shri Manik Sarkar graced the occasion as chief guest. He said that the attacks on Reserve Bank and banking industry were not an isolated issue. Reform policies were introduced to liberalise our economy and financial sector to serve the interests of the rich people and multi-national corporations. The demolition of RBI was well planned to achieve this objective. Therefore, the movement launched by RBI officers and employees must be a part and parcel of democratic movement against the reform policies. He then elaborated as to how North Eastern states were being neglected by the central government as well as RBI. He wondered why there should be only one RBI office in the entire North Eastern region. The repeated request for opening one at Agartala, the state capital of Tripura was still to be accepted. He brought to be notice of the audience that the currency system in the North Eastern region was in shambles and deplored the inaction in this regard of RBI as the custodian of the currency system of the country. There was acute shortage of coins, and notes in circulation in the market are highly soiled to be handled very carefully otherwise they might split into pieces. He strongly opposed RBI’s move to withdraw from debt management of the states. He cautioned that if this policy were given effect, the poor states would be put to grave problem. How the state of Tripura and other states in the North Eastern Region would borrow money from the market if their efforts were not backed by RBI, he questioned. He reminded that Reserve Bank is not supposed to look after a few advanced states only; it should be more responsive to the needs of the poor states too. Bank credits in these states are abysmally low. Drawing attention of RBI to this sordid state of affairs yielded no result as yet, he said. The Reserve Bank should play its due role as central bank of the country and the struggle built up by RBI officers and employees are justified and should be supported by all, he emphasised.

West Bengal minister, Shri Nirupam Sen in his address noted that the objective of the ongoing reforms were against the interests of the farmers and poor people who comprise the overwhelming majority of our nation. He then referred to the acute food crisis our country faced in the fifties and sixties. We had to depend on import of wheat from the USA under PL480. The situation changed after nationalisation of the banks in 1969. Bank branches expanded rapidly in the rural side, which was earlier totally neglected and as a result poor and marginal farmers were brought under institutional finance. This ushered in green revolution and helped increase food production and abolished our dependence on import. Unfortunately the situation changed alarmingly after the introduction of reform policies in early nineties. The farmers were being denied institutional finance and driven to the village moneylenders for their credit need at exorbitant ratio of interest. Finding no other alternative to repay the loans, the farmers were committing suicide. He emphasised the importance of the role and function of RBI in this context. He observed that the abdication of responsibilities by RBI would only aggravate the situation and therefore, should be opposed not only by Reserve Bank officers and employees but by all democratic forces in national interest.

Rupchand Pal dwelt on outsourcing of Reserve Bank and commercial banks’ jobs. Redefining of RBI role and function in the name of reform might end in total withdrawal from developmental and operational activities by the central bank of the country to hasten the process of liberalisation of the financial sector including banking. That was exactly what was happening. In this connection, he referred to outsourcing of clearing operations from RBI and public sector banks to a private company. There was no reason why a system functioning with efficiency better than international standards and without any complaints from any quarters should be hived off to a new company. RBI officers and employees were doing a good job by opposing such retrograde steps of the RBI management and should be supported by all.

Kamal N Kabra said that outsourcing of RBI jobs and functions was part of the process of globalisation. It was intended to total liberalisation of the entire financial sector to be exploited by global multinationals to serve their own interest. He raised the question why RBI board should be dominated by the industry representatives. States should have their representatives on the board of RBI.

Samir Ghosh, convener, United Forum of reserve Bank officers and Employees in his presidential address highlighted the issues for which the convention was being held. Reserve Bank’s decision to abdicate many of its core functions viz. currency management, public debt management, exchange control and supervision and monitoring of banking and other financial sectors was poising a grave threat to the national economy and financial sector including banking. While in the given situation RBI needed more staff to discharge its responsibilities, staff strength in the Bank had actually come down from 35000 in 1995 to 20,000 as at present. He then referred to AIRBEA’s persistent demand for opening of RBI office in all the state capitals and deplored the negligence shown by RBI to the North Eastern states including Tripura.

S V Mahadik, general secretary, AIRBWF thanked the gathering on behalf of united Forum and assured to organise similar convention in Mumbai with prominent personalities of the state of Maharashtra and trade unions.

On October 27, 2006 such convention on “role of RBI in current scenario” was held at Chennai with similar enthusiasm. It was well attended and presided over by A. Govindasamy, secretary, AIRBEA and addressed by Professor Venkatesh Athreya, eminent economist, T K Rangarajan, vice president, CITU, C H Venkatachalam, general secretary AIBEA, V R Udhaya Shankar, joint secretary, NCBE, E Arunachalam, general secretary, TNBEF and A Rengarajan, general secretay, BEFI, Tamil Nadu.

Professor Athreya quoting from the Annual report of RBI said that at a time when the staff strength has to be augmented to meet the challenges of liberalisation, RBI has reduced its staff strength by one third in the past 10 years. It is a clear indication that Reserve Bank is shedding its responsibilities as the central bank of the country. While Annual Report of RBI cautions about the risks involved in outsourcing, RBI itself is outsourcing its vital jobs. He said that RBI had shifted from its original developmental role and redefined its role to serve the international finance capital. Abdication of supervision and regulation would encourage speculation, terrorism and drug pedalling, he cautioned. He warned that liberalisation of financial sector would only lead to high rate of interest and farmers would suffer heavily. He categorically stated that by opting for capital account convertibility, we would be at the mercy of international speculators who would hold the country to ransom.

T K Rangarajan (CITU) observed that RBI, which was looking after the development of the country is shrinking its responsibility and diluting the regulation to help the foreign monopolistic capital, which is neither good for the sovereignty of our country nor for the economy. He called upon all sections of work force to remain united and fight against the implementation of the policies of the RBI management.

C H Venkatachalam (AIBEA) said that if RBI abandoned its responsibilities of public debt management, it would lead to inter-state disparity and social tension. He strongly condemned RBI’s move to privatise clearing operation. He said that in more than 140 countries including USA, Japan, Australia, Brazil, Indonesia, clearing operations are looked after by their central banks. Even the chairman of the Standing Committee on Finance of the Parliament was shocked to learn that RBI is privatising clearing operations. He emphatically said that if RBI is not saved financial sector and the economy of our country would suffer. He assured co-operation of UFBU in our fight to save RBI.

V R Udhaysankar (NCBE) said that Reserve Bank must ensure the security of the currency system of the country, which is under serious threat from organised counterfeiters both within and outside the country.

A Rengarajan (BEFI) said the weakening of RBI and dilution of its role and functions would play havoc with Indian economy and its banking system. He said currency notes were being shredded without scrutiny and it would lead to corruption. He urged RBI to recruit workmen staff and strengthen its supervisory role.

In his presidential address, A Govindasamy said that such convention was organised to highlight the adverse impact of changes sought to be made in the working of the Reserve Bank and to mobilise opinion of the people to save RBI. He urged upon the Bank to retrieve the jobs, which were already outsourced and demanded of the management to augment the staff strength immediately and discharge its functions in the interest of the nation.

Such nationwide campaign started with a convention at Ahmedabad on September 27, 2006. This was well attended and enthusiastically participated by as many as 38 trade unions of the state besides the employees and officers of RBI. It was presided over by Subodh Mehta, veteran leader of CITU and addressed by Asholk Punjabi (INTUC) general secretary of Gujarat Pradesh Congress Committee, R K Singh (AITUC), Jayanti Bjai Panchal (Gujarat Pradesh Mazdoor Panchayat, HMP), Dushyant Trivedi (AIVEA), S A Kadri (NCBE), Nandu Deshpande (CWC Employees Union), Professor Ketan K Shah (Economist). Leaders of AIBOC, AIBOA, Insurance Employees and various other trade unions comprised the audience. Samir Ghosh, convener of United forum of Reserve Bank Officer & Employees and general secretary of AIRBEA spoke on the dangerous national implications of current policy approach of RBI as well as how RBI is withering away. The RBI office at Bangalore has also witnessed such a convention on November 16, 2006, where almost the entire trade union fraternity and other mass organisations deliberated on the subject. 

It is pertinent to note that in such seminars and conventions all the guest speakers have been stressing the following aspects- that since independence, RBI has been performing very important developmental role which has helped in nation building: that role must not be abdicated. Our farmers are committing suicides in hundreds even six decades after independence while banking sector has a deposit base of more than two million crores of rupees. RBI the apex regulator of banking system, is virtually an onlooker. It cannot implement the policy decision, because its infrastructure suffers from serious inadequacy of staff, RBI staff strength having drastically come down. In the context of introduction of Basel II norms while RBI should gear up its own inspection machinery, its attempts to outsource the jobs to external agencies having no expertise will be dangerous and clearing of cheques is working well under RBI and its agency banks. RBI governor recently admitted that MICR cheque clearing in India is better than even global standards. Still a company is being sought to be floated to take over the job, which has to be opposed with all might and RBI must ensure the security of the currency system of the country, which is under serious threat from organised counterfeiters, both within and outside the country. RBI must not withdraw from extending customer service. It should set examples by practice, not by preaching.