Kolkata (IANS) - The position of non-performing assets (NPAs) of public sector banks will worsen if the names of corporate wilful defaulters are not published immediately, leaders of bank officers' union said on May 1.
"The Reserve Bank of India (RBI) has been steadfastly refusing to divulge the names of top corporate wilful defaulters. In the days to come, the position of NPAs will worsen if the names of wilful defaulters are not published immediately and treated as criminal offenders," All India Bank Officers Confederation's (AIBOC) West Bengal unit Secretary Sanjay Das told said.
He said, "The government and the RBI failed to bring in any stringent act or regulation to deal with wilful large corporate borrowers which account for more than 60% of public sector banks' NPAs."
The Reserve Bank of India Governor said Indian banking system could be better off if some public sector banks are consolidated to have fewer and healthier entities. Opposing the attempt of merging "weak banks", union leader Soumya Dutta said, "Every state unit of AIBOC will meet Chief Minister of respective states to oppose any move to merge public sector units."
Condemning RBI Governor Urjit Patel for his comment on consolidation of some public sector banks, Das said: "The RBI cannot shirk off its responsibility of the huge NPAs as all the banks' boards have RBI nominees as director." "We do not understand how it is possible. He (Patel) opined the public sector banks to raise private capital from the markets and not rely on the government for that. He has not asked the government to compensate the PSU banks for the opportunity cost of 'Jan Dhan' exercise and for the entire period of demonetisation which adversely affected the bottomline of the banks," Das said.
Taking a swipe at Patel for his public comment on weak banks, the union leaders said a weak bank reveals a weaker regulator. They said public sector banks are making "operating profit" but due to stringent provision norms prescribed by the RBI, against big ticket corporate loans, the net profit has come down.
'RBI can't escape responsibility for bad loans of banks'
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% 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 bank