SRINAGAR: The United Forum of Bank Unions (UFBU), representing nine trade unions of officers and workmen across public sector and private banks, has strongly objected to remarks made by Finance Minister Nirmala Sitharaman during her address at the Delhi School of Economics on November 4, 2025.
In her response to a student’s question on whether privatisation could restrict banking services to a privileged few, the Finance Minister appeared to dismiss such concerns and instead highlighted the positive aspects of privatisation. The UFBU, in a statement issued on Thursday, said it “categorically rejects” this narrative, arguing that India’s public sector banks (PSBs) have been the foundation of financial inclusion, social justice lending, rural development, and national economic stability.
The forum said that the nationalisation of banks in 1969 was a transformative step that reshaped India’s socio-economic fabric. Before nationalisation, banking largely served industrial houses and elite business groups, the statement said. “Public ownership opened the doors of credit to farmers, workers, small businesses, women, weaker sections and rural citizens,” UFBU noted, adding that PSBs expanded from a few thousand urban branches to cover lakhs of villages — a reach that private banks “neither attempted nor intend to serve” due to low profitability in rural regions.
The UFBU said that priority sector lending, agricultural credit, SC/ST schemes, self-help groups, student loans and MSME support were made possible only because of public ownership. “During recessions, crises and even the COVID-19 pandemic, it was the public sector banks that stood firmly with the nation without fear of collapse or exploitation,” the statement said.
Warning of the “ill effects and risks” of privatisation, UFBU said private banks focus mainly on profit, often close unprofitable branches, increase service charges, and neglect weaker sections of society. It said that financial exclusion in rural and semi-urban India would deepen if privatisation proceeds, as most government social schemes — from Jan Dhan to MGNREGA and pension disbursements — are handled by PSBs.
The forum also said privatisation leads to downsizing, contractual jobs, erosion of reservation benefits and curbs on trade union rights. “India has witnessed repeated failures of private banks such as YES Bank, Global Trust Bank, and Lakshmi Vilas Bank, where PSBs and the government had to step in to rescue depositors. In a fully privatised system, who will protect the people?” the statement asked.
The UFBU emphasised that PSBs are accountable to Parliament, the Comptroller and Auditor General, and the people, while private banks are accountable only to shareholders. It said the NPA crisis was not a failure of public ownership but the result of corporate defaults and liberalised lending policies.
Referring to international experience, the forum pointed out that after the 2008 global financial crisis, several countries moved towards greater public control of banking. “India must learn from global experience, not repeat their mistakes,” it said.
The UFBU also stressed that the success of major government initiatives such as Jan Dhan Yojana, Direct Benefit Transfers, and rural financial literacy was driven almost entirely by PSBs. “No country has achieved universal banking through privatised institutions. There is no evidence that privatisation ensures inclusion,” it said.
Rejecting the notion that privatisation equates to professionalisation, UFBU said professional governance could be achieved through capital infusion, technology, accountability, and human resource development without changing ownership.
The union concluded by demanding a categorical assurance from the government that no public sector bank would be privatised. It also called for strengthening PSBs through capital support, technological upgrades and transparent governance, and sought a public consultation and parliamentary debate before any decision affecting depositors, employees, and citizens.
“Public sector banks are national assets,” the UFBU said. “We stand with citizens, employees, farmers, workers, and pensioners who believe that banks belong to the people of India, not private profiteers. We will not allow them to be sold.”
