Indore: No write-offs, recovery from big giants must: Venkatachalam

Indore: Rs 110 lakh crore that belongs to the hard earn money of common depositors of the banks, is under serious threat due to mounting amount of bad loans or non-performing assets (NPA). If the restructured loans are added, total NPA will go beyond Rs 15 lakh crore. This can be checked only when central government comes out with stringent measures against the big corporate defaulters, said general secretary of Federation of All India Bank Employees Association (AIBEA), CH Venkatachalam, while talking to media here on Monday.

He was here in the city to participate in 25th Triennial General Body meeting. AIBEA is the oldest and largest trade union of bank employees
in India, which represents nearly 5 lakh employees of all the banks. The senior most union leader expressed his views on several burning issues concern with banking industry of the country. He informed that As of today, total deposit in the banks is around Rs 110 lakh crore, which is the
hard earn money of common depositors. We need keep this precious money safe.

The amount of bad loan has gone to Rs 8 lakh crore and if the restructured loans are added, then the total NPA stands at more than Rs. 15 lakh crore. This is certainly alarming for the country as well as the banking industry, Venkatachalam said, adding We demand that there should not be writeoff of the bad loans, and recovery of this must happen. Importantly, the bulk of these bad loans are the contributions of big corporate companies many of whom are deliberate and willful defaulters.

Taking huge loans and not repaying the same has become an exquisite art because these people know that nothing will happen to them and they will get political patronage of the government, the senior banker said. The union leader further said that Bbad loans are increasing alarmingly and the banks are compelled to make huge provisions from the profits, and thus profits are depleted to prevent internal generation of capital. For example, for the year end March 31, 2017, total earned gross profit of banks was Rs 1,58,982 crore and provision for the bad loans was made of Rs 1,70,370 crore. Therefore the banks published net loss Rs 11388 crore.

‘Privatisation would reduce service’ Talking about the privatization of the banks, Venktachalam said that just on the name of banking reforms, government is trying to privatize the banks and trying to merge and consolidate the banks. We know how private banks have collapsed in many western countries including USA. We cannot afford such risk in India. Similarly, we need expansion of banks to reach all the people of our country. But by merger, number of branches will be closed and services to the people will be reduced. Expressing his resolve, he said that we shall carry on a campaign amongst the people for the need to save our public sector banks from privatization and mergers.