‘RBI can’t escape responsibility for bad loans of banks’
Chennai, May 1 (IANS): With its nominee Directors on boards of all the government-owned bank, the RBI cannot escape its responsibility for the huge non-performing assets of the banks, said a top union leader said here on Monday.
All India Bank Employee’s Association (AIBEA) General Secretary C.H. Venkatachalam also demanded a probe by a Parliamentary Committee or by the Central Bureau of Investigation (CBI) to book those responsible for the bad loan scam.
In a statement issued here, Venkatachalam said: “The total bad loans of the banks have crossed Rs 13 lakh crore. Even according to RBI and the Finance Ministry, a few big borrowers’ defaults constitute more than 70 per cent of the bad loans.”
Coming down heavily on Reserve Bank of India’s Deputy Governor Viral Acharya’s view that some of the government banks should be privatised, Venkatachalam said: “The only stress our banks are facing today is on account of increasing bad loans by the corporate houses and big business.”
All public sector banks are making operating profit despite all odds and pressures and the net loss is only due to provision for bad loans.
“For the year ended March 31, 2016, the public sector banks earned Operator Profit of Rs 1,37,306 crore. But total provisions for bad loans and contingencies were Rs 1,55,297 crore and so there was net loss of Rs 17,991 crore,” Venkatachalam said.
“In all the banks, RBI has its nominee Directors on the Boards. All big loans are sanctioned with the concurrence of the RBI. RBI cannot escape from its responsibility now and advocate privatisation,” Venkatachalam said.
“Let there be proper accountability for bad loans. That is why AIBEA is demanding parliamentary probe or by CBI to book those responsible for the bad loan scam,” he added.
“It is unfortunate that Viral Acharya is trying to denigrate public sector banks in this fashion instead of suggesting measures to take tough action on wilful defaulters and to recover the bad loans,” Venkatachalam said.
Meanwhile, the Indian Banks Association, the management body of a majority of banks in India, has invited the bank unions for initiating negotiations for the next wage settlement in the banks.
According to the AIBEA, the 10th Bipartite Settlement on wage revision for 10 lakh bank employees and officers was signed in May, 2015, covering the period from November 2012 to October 2017. Hence the next wage revision is due from November 2017.
A total of 43 banks in public sector, private sector and foreign banks would be covered by the settlement.
Most of the banks have already authorised the Indian Banks Association to discuss with the unions on their behalf, Venkatachalam said.