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2953 Resolution seeking [RAJYASABHA] Banking Companies 2954 disapproval of Banking (Acquisition and Transfer of Companies Ordinance, 1969 Undertakings) Bill, 1969 I. RESOLUTION SEEKING DIS Again, these finances were utilised for, APPROVAL OF THE BANKING particularly, hoarding and profiteering in COMPANIES (ACQUISITION AND foodgrains. It has been estimated that TRANSFER OF UNDERTAKINGS) sometimes the advances amounted to even Rs. ORDINANCE, 1969 (No. 8 of 1969) 130 crores as a result of which the poor —contd. peasants in the countryside had been fleeced II. THE BANKING COMPANIES and the consumer in the town had suffered on (ACQUISITION AND TRANSFER account of the profiteering in foodgrains. This OF UNDERTAKINGS) BILL, 1969 — has attracted adverse criticism from various contd, economists and also from various surveys and documents published by the Reserve Bank of SHRI BHUPESH GUPTA : Mr. Vice- our country. Chairman, Sir, for some years our people have been demanding nationalisation of the Much of the speculation and black trade commercial banks in the country. The demand would not have been possible were it not for was due to the fact that the banks had been the fact that the banks were in control of those working not only to the detriment of the very people who are occupying today, to the national interest but even against the principles misfortune of this great nation, commanding and commitments of the Constitution of our positions in our economy and had not been yet country as enunciated in its Directive pulled down from those positions in order to Principles. Experience has shown that banking be pushed back in their economic operations. funds were being utilised to build up concentra- tion of wealth and economic power to distort Now, Mr. Vice-Chairman, the total bank our economic development, to hold the society deposits in 1951 amounted to barely Rs. 900 to ransom, to indulge in profiteering and crores. In 1965 it rose to Rs. 3,07a crores of speculation and to create a run on our rupees, and today it is well over Rs. 4,000 economy. crores. The significance of this will be understood when we appreciate that the Experience had also shown that by using deposits now account for 15 to 17 per cent, of the huge funds available to the banks, savings the total national income of the country of the community at large, some sections of compared to 9 per cent, which was the amount the big business at the top were trying to ol deposit in 1951. That is to say, in a period of occupy an entrenched position in a whole 15 years banks have been in a position to grab number of industrial units and in vast spheres 15 to 17 per cent, of our national income of trade, with the result that our planning whereas only ten or fitteen years ago they could again and again came up against the get only 9 per cent, which was also a big sum. difficulties created by them, and these people Now, where does the money come from ? by reason of their control of such huge national reserves were in a position to Deposits do not come from the big families. disregard national priorities and give rather a Deposit comes from 1.25 crores of depositors distorted and perverted direction to our spread all .over the country. Theretore, we can economic growth. Therefore, from the point say that it is the savings of the nation and the of view of the national economy it is made community, and that is why these huge savings more and more clear that we would have to ol the nation and the community should be in take a measure of this kind. the hands of the nation, subject to the Not only this, the banking world under superintendence, direction and control of the the control of a few families operated to the nation. Exactly the opposite happens. They have detriment of the common man. Reckless passed into the hands ol those people who were credit expansion by many of the banking thriving on the savings of the common people concerns resulted in what may be easily who were suffering. This aspect has to be called deficit financing in the private sector borne in mind. giving boost to prices and inflationary processes which the country can think of How can you think of giving a properdirection only after taking into account side by side to our national economy when• 15 to 17 per the official deficit financing, credit cent, of the national incomehad been placed in expansion for speculative and other the hands of a fewmonopoly houses who were purposes by the major banks in our country. indulging in Often that aspect has been overlooked while criticising the deficit financing which goes on through the printing of notes in the Nasik Press. 2955 Resolution seeking [7 AUG. 1969] Banking Companies 2956- disapproval of Banking [Acquisition and Transfer of Companies Ordinance, 1969 Undertakings) Bill, 1969 corruption, blackmsrketing, black trade, some Whereas the banks were getting these huge ot which we always get to know even from amounts in their hands, we find that the the official reports. For example, recently we industry received, according to the latest got the report of the Licensing Inquiry figures 61*5 per cent of the total bank Committee. That is one aspect of it. Another advances, but this is again misfeading. If you is that these deposits were acquired from all go into the break-up,, you will find that most of over the country, from all the 17 or 18 States these bank advances went to the big business of India, Union Territories included. But they houses and it has been shown that 20 or had been spent in four or five States, namely, 30families have grabbed a major share ot the bi West Bengal, Madras, Maharashtra, Mysore .5 per cent of the total bank advances under the and Gujarat. I mention this fact because when head "Industry." Therefore, you must not just we talk about regional disparities and generalise this thing. We must take into economic imbalances in our country, we must account here the •"haves'* and the "have-nots" also remember that this is largely due to the within their own sphere. fact that those who have been controlling the finances of the country, have been investing In so far as agriculture is concerned, it has not from a broad national angle, but from the suffered most under these private banks. angle ot their business interests, taking into Agriculture has received only o. 2 per cent of account their convenience and also the the total advances, not even 1 per cent of the possibility of earning quick profit. As a result total advances. In other words, it got Rs. 20 many of the other States have suffered. lakhs out of every Rs. 100 crores ol" advance. This is the position. 'Yet, we are told that agriculture was receiving a fair deal.. From agriculture we receive 45 per cent of our In this context, Mr. Vice-Chairman, if you national income. Seventy per cent of the just look at the banking offices in our population depend on agriculture. All goes country—-I am giving some figures— you well, if agriculture is well. All goes wrong, if will find that out of the 5,812 bank offices all agriculture is wrong. Yet the huge savings of over the country, 3,065 are concentrated in the community are utilised not for helping and five States only. This is again another evidence sustaining the vital, life-giving sector of our of concentration of the banking operations, not economy, but the funds are diverted into from the point ol view ot broad national monopolistic channels to build up economic interest, but from the point of view of those empires and power. This is certainly one major who are corn-minding the savings of the reason why banks should have been natio- community. What does it mean ? The national nalised much earlier. We are paying for our savings which came into the hands of some folly in terms of sweat and toil, tears and have not been utilised for the nation in a fair sorrow. If the banks had been nationalised and even-handed manner, with the result that a much earlier, Parliament would have been in a targe number ot sectors became "have-nots" position to demand' and make allocations and from the point ot view of accomodation of credit accommodation for our agriculture. But credits and other facilities which are as the banks were in the hands of the Tatas and particularly required for starting co-operative, Birlas, we were not in a position to say small and even medium industries. It is a anything about them. Questions would not be common complaint in our country to-day that allowed because, it would be said, the matter is the smill and medium industries, not to speak not under any Ministry and it is not within the of co-operatives, do not get bank purview of parliamentary check-up or accommodation because the bank directors and interpellation. others at the top would like an internal arrangement among them to be so made that Commerce received 25.6 per cent of the total the deposits available to them go to finance bank advances, but here again the small trade their business, subsidiaries ot their companies and business, the cooperative sector, suffered and also for building up mutual business very badly. When we say commerce, we have empires. Therefore, not only the peasants and in mind here the big elements in the field of the workers and the commin man have industry and commerce, in the commercial suffered under the existing arrangement which world,, who grab the money by reason of the- we are now going to change, but even small the control of their banks.

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