By Krishna Jha
November 3 this year marked the centenary of the great trade union leader in banking, H L Parwana. On this day we recall him and his contributions to the history of banking industry in our country. For the cause of banking he sacrificed his life, and toiled to emancipate the bank employees who were suffering from exploitations, denials, deprivations and humiliations. It was the drawing force for him that brought him to the trade union movement since he was inspired by the great history of the struggle of working class movement in our country. His vision and unusual leadership qualities will always inspire the bank employees and thousands among them are carrying out the heritage he has left behind.
To celebrate the occasion, Communist Party general secretary D Raja inaugurated the function at Parwana Bhawan in Nagpur on the occasion of marking the centenary of H L Parwana.
Parwana was born in a poor middle class family in Punjab. He was a bright student and always secured first rank in exams from early days. His school was ten kilometres away and everyday he used to walk up and down. He was highly inspired by the freedom struggle, and its leaders like Lala Lajpat Rai and Bhagat Singh. Jallianwalla Bagh massacre had a very deep impression on him. Despite his longing to study more, he had to leave and opt for a job. In Punjab National Bank, he got a job of daftary, though he had first rank in matriculation. Later he managed to graduate in Urdu. His brother was a trade Union worker and Parwana, encouraged by him, organized a union in the bank. That was the beginning which saw no end till he passed away.
He had realized early in his career while organizing the working class in the banking industry that the potential to develop in a country largely depends on the strength and expansion of the banking sector with people’s orientation. To create such a system, the steps towards nationalisation of banks became imperative. One of the major initiatives in the process of bank nationalisation was visualized as involving more people to ensure financial inclusion. It was formulated as our goal in our Constitution to build our nation as a democratic socialist republic, for which the prospect of progress depended on financial facilities made available by the banking institutions.
After independence, for progress and development, people oriented path was opted as seen in the first five year plan of 1951 in which the support of banking system was required.
After a series of efforts, fourteen banks were nationalized on July 19, 1969 by the government. These were the 14 largest private commercial banks of the country. The nationalization was completed through the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969, and decided to hold more than 50 per cent stake. Soon after, in the second phase, on April 15, 1980, the then government nationalised six more private banks with a capital of Rs 200 crore.
It was hardly three decades ago, before the banks were nationalized that in the Second World War the entire financial sector of most of the countries was drowned in losses. As a result, it was the capitalist countries that initiated the process of nationalisation in their own countries. India was no exception. But the step was taken here to restrain the monopolization of economy also, which was not without deterrents. There were wars that came as economic and political upheavals. The years of 1962 and 1965 had witnessed the immense pressure on public finances.
It was also a fact that banks needed to spread out to the rural regions as well. It was only limited to great cities. The banks were all private till 1968, monopolised by industrialists, with the share of industry in the credit disbursed by private banks doubling between 1951 and 1968 from 34 per cent to 68 per cent, while agriculture was receiving less than two per cent of the total credit. People’s confidence was very low in banking, which was a major obstacle in the expansion of banking in India.
Nationalisation of banks changed the fate of rural areas. Banks started coming out of cities and opening in villages and towns. The nationalisation itself transformed the whole sector on a priority basis.
To make the country self-reliant in food security, steps were taken towards Green Revolution too and nationalisation was one factor that also strengthened the process. Gross domestic savings almost doubled as a percentage of the national income in the 1970s.
At the same time, there was an increase of nearly 800 per cent in deposits in India’s public sector bank branches, and a massive 11,000 per cent jump in advances (loans). The share of small-scale industrial units in total bank credit increased from 6 per cent in June 1968 to 12 per cent in June 1973. Steady increases were recorded in the share of rural areas in aggregate credit and deposits.
Yet, the process was not all that smooth. In its course, bank nationalisation also had its share of criticism from time to time, and it is said that the then government had taken this step for political gains. A battery of bank union leaders like H L Parwana with Naresh Pal, Prabhat Kar, Sudhin Biswas, Tarakeswar Chakravorty and many others , stood up to secure the nationalization process. Our 25 members in Parliament also formed a formidable force for protecting the people’s cause.
But today the scenario stands changed. As in March, 2023, the public sector banks have a total gross operating profit as 2,28,414crores.Net profit after provisions stands at 1,00, 814 crores. Thus the bulk of the profits, that is 56 per cent of it, goes for provisions of bank loans or writing them off. Thus the people’s money is looted by the corporate houses. Just as we fought for the nationalisation of banks, we have to stand for public sector banks now, and struggle to defeat the steps towards privatization. (IPA Service)