Finance minister P. Chidambaram with UBI chairman and managing director P.K. Gupta in Calcutta on Wednesday. Picture by Kishor Roy Chowdhury

Calcutta, Dec. 6: When the Centre introduced computers in PSU banks, there was stiff resistance from employees who feared loss of their jobs. Two decades later, led by the Left trade unions, the employees and the government continue to spar, though the fight is not over computers but issues such as mergers and acquisitions.

And finance minister P. Chidambaram is willing to take sides as he rallied for consolidation here in the city, the hotbed of union activities.

At a meeting organised by the city-based United Bank of India (UBI), Chidambaram rooted for the three C’s in banking — convergence, competition and consolidation — among the employees and urged them to embrace the principles much as they did with PCs in the last two decades.

“Just as you have accepted computers, I hope you agree to the convergence, competition and consolidation in the banking system,” the finance minister said after inaugurating the e-banking initiative of UBI.

Chidambaram said banks needed to build muscle to fulfil its role as an engine of economic growth. This was a call for mergers and acquisitions among Indian banks, so that they can stand shoulder-to-shoulder in assets with leading global banks. In India, only the State Bank of India is among the world’s top 100 banks.

Chidambaram said only by M&As can banks have the mass to step up credit, which in India as a percentage of GDP is just 45 per cent compared with nearly 100 per cent among the developed countries. The Left unions are opposed to M&As, as they fear losses in jobs.

The unions were apprehensive of computers as well and had vehemently opposed them at their introduction in PSUs only to accept them when made aware of their role in improving efficiency.

PC’s pep talk on the three C’s holds strongly for UBI — a bank which had climbed down the pecking order since its nationalisation almost 40 years ago, in 1969.

UBI has only just turned the corner to post a profit in the last fiscal. The bank is a laggard in core banking solution (CBS), with this online facility arriving at least four years after its was introduced in other banks.

The finance ministry wants strong banks to take over weak banks. Though UBI is not a weakling, there is a possibility of it getting devoured by a larger bank.