 Hello, and welcome to NewsClick. Today we have with us the Secretary General of the All India Public Sector and Central Government Officers' Confederation and the General Secretary of IBOC, Mr. Thomas Franco. And he's here to talk about a recent development in the banking sector. Welcome, Mr. Franco. So in the last couple of days, we have seen that GeoPayments Bank, a division of reliance industries, has begun to function. And this is a new model that has been operated over the last couple of years. So what are the implications of this model for the banking sector? And specifically, what happens when organizations like Reliance are involved in this? The concept of payment banks and small banks itself is not a correct option for our country. Public sector banks were started after nationalization only for the purpose of providing services to the common man, which they had been doing well. But after the reforms started in 1991, the number of branches of public sector banks which are in rural areas and semi-urban areas is going down. On the one hand, reserve bank is permitting banks to close down existing branches in these areas. But then you are starting payment banks and small banks saying that you have to bring in financial inclusion, you have to provide services to the common man in the rural areas, it's a contradiction. On the other hand, you are also saying that already we have covered every Indian through the Jandan accounts. Everybody has opened an account. So what is the purpose of these payment banks and small banks itself is acoustic. Already we have the experience of Airtel Payment Bank. They stole the data of the public because other cards were linked to those accounts and they transferred money which were social security scheme funds. Without the knowledge of the customer itself, account was opened and money was transferred. And ultimately what the RBI has done, just a fine of five crores. That is nothing for Airtel. So that is an example how these banks when they do not have proper control mechanism can misuse the system. Here a small bank or a payment bank when it is coming to an existence, especially in this particular case, Jio Payment Bank, with the collaboration with the biggest public sector bank in the country, we have to be worried. Payment Bank of India, the largest bank in the world in terms of number of branches, surprisingly has gone as a minor partner with just 30% shareholding with a company which has no experience of banking. The purpose they say is that to get the technological advantage of Jio. But that technology can be obtained even otherwise. Many of our technologies we are depending on other agencies like Tata Consultancy Services is there, Ifro is there who are providing some of the services. Here what as an organization we are worried is that there are two books on the history of reliance. One is Amvani and Sons, another is Folly Sturfins by Amish McDonald, which has narrated how reliance became a big industry and how now it has become one of the richest or the richest person in the country is today Mr Mukesh Ambani. But if you look at that history it is all through dubious means, bribing people. The Sriniv Ramvani has made a statement which is mentioned in the book that I do not violate any laws of this country but I get the laws changed according to my need. That is the power they had been and they still hold and whichever political party is in power they had been close to that political parties probably due to the political funding for the elections they get that access. Now GEO already has created problem in the telecom industry. The telecom players are being affected because of their mode of those old age tactics that initially you give something free, people get addicted to that then you start charging whatever you want that is the tactics they are using. The same reliance was refused fame and banking license for a universal bank by the Reserve Bank of India. So they must have definitely had valid reasons when they gave license for one then they did not give to reliance though reliance was on out the applicants. And Reserve Bank's earlier reports have stated that there should not be corporates getting into the banking sector and earlier experience of nationalization also a statement was that time made by Dr. R. K. Ghassari that unless the clutches of the business houses is removed from the banking sector the banking sector cannot serve the common man of the country but now a company which was refused universal banking license gets into banking as a partner with State Bank of India which has the highest branches highest number of account holders and definitely they will have this access because today all these accounts are linked so they will have access to so much of data. Mr. Mukesh Ambani himself has made statement data is oil so probably they are looking more for this data and Reserve Bank has a provision that if this fame and bank functions satisfactorily for some time then this license can be converted into a universal banking license. So here I see that this is a backdoor entry and why at all Reserve Bank should give a license to a company which is the largest borrower in this country. I think 2016 March data itself the Mukesh Ambani group alone has an outstanding of 176,000 crores to the banking industry. Now you are allowing them to collect deposits, fame and banks can collect the deposit up to one lakh, they can make small payments, they can issue debit cards, they can give internet banking, they can use mobile banking. So they are going to make use of the database available and use the geotechnology to get hold of these customers which in a longer run will affect State Bank of India itself. And here I would like to quote the fast history of reliance when they were allowed to purchase shares of Indian petrochemicals limited. Initially they were, people were told that they are given only 26% of this shareholding. So 74% is with the government. So IPCL will be a public sector undertaking only. But today what happened? IPCL is no more. Reliance took over. This danger can happen. Do we want that in this country State Bank of India who is doing a human service for the development of this nation should be converted into Reliance Bank of India? Here the Reserve Bank has to be questioned. The ministry which is monitoring these things also have to be questioned. And one aspect which the public should know is that Dr. Urjit Patel who is the president, governor of the Reserve Bank of India had been an employee of Reliance and he was a board of director in State Bank of India as deputy governor. And now he is the governor of the Reserve Bank of India when the famous bank itself is launched. The license was given I think in 2015. So whether there is an excess and if it is so there has to be a serious inquiry. The Vigilance Commission, Central Vigilance Commission and others should get into these details and see whether it is correct. And for the public at large what I am worried is that very soon there will be a lot of big advertisements. They launched it in a very subtle manner probably expecting an opposition from the unions, associations, even public. In fact many organizations including iBook has returned to the Reserve Bank of India that it is not correct to give a license to Reliance for a famous bank. But now they have already launched it. We have to watch it very carefully and people should not get lured by the advertisement these people will make. And State Bank of India itself should have a relook on the shareholding that is why at all State Bank of India should have that kind of a junior partner role with the famous bank with the biggest borrower of the country. The government of India has to quickly have a review of the policy. Today the banking sector is under tremendous stress, frauds are coming, supervision has become weak. At that point of time you allow this kind of private players even after Airtel has been fined for such a dubious action they have done. Should we still continue to give licenses to the corporate sector to run the banks in this country? That is going to be a disaster for the nation. This country needs form credit, small credit, artisans and cottage industries, small industries, medium industries they barely need credit. Which the public sector banks alone can cater to. We are also seeing the scam in ICICI and access. I don't want to go into the details. But so far people were saying that private sector is good, why not private sector is the public sector banks. Now the reversal has started. In fact we from the all India bank offices and confederations we have been demanding before also that the private sector banks should be nationalized for a country like ours which needs the funds mobilized from the common bank reaching back to the common bank through the credits which is important for the growth of this country, which is important for the employment generation of this country. So my humble appeal is that the government should quickly have a review. The banks also should have a very quick review. Reserve banks should have a real look at what they have done. And one dangerous thing which I am worried is also, see last month I was in Wofall. When I was addressing a press conference many of the press reporters were complaining that ATMs are not functioning because non-availability of cash. Yesterday I was in Visapattana. I wanted to draw some money. I went to eight ATMs of different banks. Not a single ATM had cash. The chief minister of Andhra Pradesh, Mr. Chandra Babu Naidu, has made a public statement that RBI is not providing adequate currency and people's trust in the banking system is gone. Now I have a doubt that whether it is done intentionally. Why Reserve Bank is not providing adequate cash? Why people are drawing more money from the banking system and holding? Because that trust is going down. This is dangerous for the banking sector. In fact in 2009 there was an incident. ICACA had a run on the bank. People had some rumour that ICACA is not doing well and people started withdrawing money and the government instructed through RBI to state bank to pump in money. They pumped in liquid cash and the crisis was avoided. But now this kind of crisis I am seeing in Tamil Nadu also. Last three days back I had written to my bank as well as I discussed with Reserve Bank of India that most of the places in Tamil Nadu also there is shortage of currency. Maybe it is there all over the country. So you see the idea to promote more of digital transactions and more of mobile banking which people like Reliance you can make use of. This is also a big question which the RBI and government has to answer. Thanks to NewsClick for covering various aspects of importance to the larger masses of this country. Thank you Mr. Franco for talking to us on this vital topic. That is all we have time for today. Please keep following us at NewsClick.