Unions turn against concessions to willful defaulters
Insolvency and Bankruptcy Code has become a method to loot public money because banks incur huge haircuts and sacrifice in these deals: AIBEA
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Mumbai The Reserve Bank of India (RBI) has recently issued guidelines saying that even for willful and deliberate defaulters, concessions can be given to write off their loans. However, the bank employee union, All India Bank Employees’ Association (AIBEA) has expressed its concern over concessions to be given for even willful defaulters for writing off their loans.
AIBEA has demanded recovery of bad loans from big companies. The only major problem in the banks today is the increasing bad loans because of the default by big corporate companies. We have been demanding action against them to recover the loans. But the government is giving them more and more concessions. For the past six years, bad loan accounts are referred to tribunals under Insolvency and Bankruptcy Code (IBC). Instead of loan recovery, these loans are being sold to some other companies at cheap rate and banks have made huge losses, bank employees unions say. IBC has become a method to loot public money because banks incur huge haircuts and make sacrifices in these deals. Defaulters escape without any penal action on them. Another corporate company is taking over these loans at cheap rates, they contend. Talking to Bizz Buzz, CH Venkatachalam, General Gecretary, AIBEA says: “Instead of strengthening the recovery laws to get back the bad loans, RBI has recently issued guidelines that even for willful and deliberate defaulters, concessions can be given to write off their loans.”
Actually criminal action should be taken on these willful defaulters. AIBEA will shortly publish the list of these willful defaulters, he said.
For FY23, public sector banks’ (PSBs) total gross operating profit stood at Rs2,28,414 crore. Net profit after provisions was at Rs1,00,814 crore. Thus, the bulk of the profits (56% of the profits) earned by the banks went for provisions for bad loans and write-offs. Thus, people’s money is being taken away by corporates. Just as bank employee unions fought for nationalization of banks, today it is our duty to defend public-sector banks and fight to defeat the attempts of privatization, he added.
According to trade union leaders, AIBEA has been resisting and fighting against this retrograde move of the government. If there is any step taken by the central government to proceed with privatisation of our banks, immediately, AIBEA will give a call for countrywide strike to oppose such moves, they say.
