Banking

As Andhra Bank Fades Into the Pages of History, an Emotional Sting for Telugu States

The bank was founded by Bhogaraju Pattabhi Sitaramayya, a veteran freedom fighter and close follower of Mahatma Gandhi on November 23, 1923.

Hyderabad: Andhra Bank, a premier public sector bank with deep roots in the erstwhile undivided Andhra Pradesh, is all set to vanish from public view from April 1, in a move that draws the curtains on a significant chapter of regional history.

The bank was founded by Bhogaraju Pattabhi Sitaramayya, a veteran freedom fighter and close follower of Mahatma Gandhi on November 23, 1923. Its beginnings were modest, with a single branch, and later grew by leaps and bounds over the past nine decades.

The state-run lender has now been merged with the Union Bank of India and the Corporation Bank in line with finance minister Nirmala Sitaraman’s decision to merge ten public sector banks (PSBs) into four big-ticket banks. The move, Sitharaman has asserted, aims to bring down the volume of non-performing assets and build a strong banking system, while making banking cost-effective.

The move, however, will snap an emotional connection that hundreds of thousands of Telugu-speaking customers had with the bank. With the merger, the bank will lose its identity and logo as it becomes part of the Union Bank of India. Reports say that the new entity will have its headquarters in Mumbai.

The new combined entity will be the fifth largest public sector bank and will have the fourth largest branch network of any bank in India, Union Bank of India said.

In its early years, Andhra Bank, which was chaired by Pattabhi for nearly two decades, was inevitably intertwined with the freedom movement. In later years, the institution played a key role in the progress of the agrarian economy in both the Telangana and Andhra regions. It is well known for being a pioneer in issuing credit and Kisan cards.

Postal stamp of Pattabhi Sitaramayya. Photo: Wikimedia Commons/India Post, Government of India

Pattabhi’s admirers and supporters seek to link the merger of the Andhra Bank to more broad attempts made by the Narendra Modi government to erase the images of Congress icons such as Jawaharlal Nehru by replacing the Planning Commission with NITI Aayog and the emasculation of the National Development Council.

The end of Andhra Bank as an individual institution is also a bit of a double whammy for the two southern states. Three years ago, the State Bank of Hyderabad, which represented the rich legacy the Asaf Jahi dynasty of the erstwhile Hyderabad State, was also confined to the pages of history following its merger with the State Bank of India.

When the linguistic division of states took place and Hyderabad was made the capital of Andhra Pradesh in 1956, Andhra Bank had its head office shifted to Hyderabad. Since then, it continued its operations with its head office in Telangana, even after the bifurcation of Andhra Pradesh. Andhra Bank was launched with a paid-up capital of Rs 1 lakh and authorised capital of Rs 10 lakh, expanding its footprint across the country with 2,885 branches in 25 states and 6,687 delivery channels over a period.

Besides, it also has its presence in Dubai and Malaysia, with its total turnover in FY’20 reaching close to Rs 4 lakh crore.

Also Read: Implementing India’s Great PSB Merger Is Proving to Be a Giant Headache

The bank’s unions are, to put it simply, are not happy.

“The merger is not to reduce the NPAs, but only to protect the 60-70 defaulter corporate giants from the debt burden of Rs 7 lakh crore with a bailout package,” alleges Kondala Rao, chairman of the Andhra Bank Employees Union.

Talking to The Wire, Rao recalled the importance of the Andhra Bank during the colonial regime. “Farmers were made to fall on the feet of British officers, literally begging for a loan of Rs 50. Pattabhi wanted to infuse a sense of pride among Indians and launched a bank dedicated for the people of his Andhra state.”

The union leader expressed anguish at the NDA government riding roughshod over the self-pride and sentiment of Telugu people with the decision to merge the bank.

“Andhra Pradesh was divided and the promise of special category status was belied. Now, as if rubbing salt to injury, another symbol of Andhra people is being destroyed,” lamented Rao.

Regional sentiment

When the merger was first announced in September 2019, it sparked a widespread backlash.

The Modi government was accused of exhibiting its bias against the two Telugu states in pushing through its merger proposal. The decision to not merge some banks based in the Hindi-speaking belt and a few lending institutions in a few BJP-ruled states, which have “region-specific” names, were cited as pointers for the alleged discrimination.

These include Punjab and Sind Bank, Punjab National Bank and UCO bank with bases in Delhi and West Bengal respectively, Canara Bank, identified with a region in Karnataka, Bank of Baroda in the PM’s native state of Gujarat and Bank of Maharashtra.

Andhra Pradesh Congress Committee Legal Cell chairman C. Sundararama Sarma said the way the merger of Andhra Bank was forced through deeply hurts the sentiment of Telugu people.

What is perhaps more worrying is the stoic silence maintained by the governments of Telangana and Andhra Pradesh. The two governments, headed by Telangana Rashtra Samithi and YSR Congress Party, were expected to adopt a resolution to push for the retention of Andhra Bank as its own entity.

The two states have 42 MPs, but none have registered their dissent either in Lok Sabha, pointed out Sarma. The Congress leader wished that the government had at least retained the name of Andhra Bank and let it lead the other two banks as part of the merger.

The employees of Andhra Bank, under the aegis of the All India Bank Employees Union (AIBEU), launched a series of agitations since the merger was announced in November 2019.

Leader of Opposition in Andhra Pradesh, N. Chandrababu Naidu, and Telangana’s minister T. Harish Rao mailed representations to the Centre, requesting to leave the Andhra Bank untouched from the merger proposal. But their appeals seem to have had no bearing on the Centre.