Government should not ignore concerns of Unions and economists or else it will result in more scams and looting of people’s money, opines C.Srikumar, General Secretary of AIDEF
A retrograde and ridiculous recommendations have been made by a Committee of the Reserve Bank of India to allow large Corporates, Industrial Houses to promote their own Banks. The AIBEA the representative body of the Bank Employees have rightly termed this Act “unwise, undesirable and unwanted”. Let us think about a situation where the defaulters like Nirav Modi, Vijay Mallya and Sahara’s Subrat Roy and many such defaulters who illegally amazed thousands of Crores of poor people’s money from the Banks becomes owners of the Bank. Already the public are scared and worried about the fate of their deposits in the Banks, which is ultimately their life time savings and terminal benefits etc.
Already the Government is bent upon to destroy the Public Sector Banks through privatization, merger of Banks and closure of Branches etc. Government is least bothered about recovery of Corporate Bad Loans, but it is very eagerly and happily giving concessions to the Corporates and crony Capitalists. The common man is heavily taxed in the name of Service Charges for deposits and withdrawal. The recent development is about the heavy losses incurred by the Laxmi Vilas Bank. The Government and RBI instead of taking action on those people responsible for creating such a huge loss by the Laxmi Vilas Bank and fixing accountability of RBI in this debacle have decided to merge the Laxmi Vilas Bank with DBS Bank, Singapore. The DBS Bank is a small foreign Bank. This decision of the Government gives a clear indication of the present Government to permit and encourage foreign capital in the Indian Banking Sector.
Public Sector Banks are always under pressure to sanction huge loan to the crony capitalists and private corporates. Our banking system has suffered a lot because of the bad loans. The bad loans have gone up alarmingly according to AIBEA and now it is around Rs. 10 lakh crores. The Government has admitted in the Parliament that there are 9331 willful defaulters who alone owe Rs. 1,22,018 crores and so far no action has been taken to recover these bad loans. Why the Government is not declaring willful defaults as a criminal offence and why criminal action is not taken against the defaulters. The defaulters have very comfortably escaped to the foreign countries and people fail to understand that why the Government is not bringing them to India to proceed against them.
In this background how can the Country allow these private corporates to establish Banks. There are many examples that how many large business corporates have collapsed. The Banks and Business being managed by such defaulters and criminals will ultimately collapse since past experienced says that these Banks will divert huge loans to notorious persons. It is not that only the Trade Unions and the Political Parties have criticized the recommendations of the RBI Committee, Eminent Economists Raghuram Rajan, Vijay Kelkar, Shankar Acharya, Arvind Subramanian, Viral Acharya and so many others have also severely criticized the recommendations of the RBI Committee. The RBI know about what has happened in the past. It is these crony capitalists and the corporates who have mismanaged the Banks in the past and today they are the defaulters. Then why the RBI and the Government is keen to permit them to operate Banks. The RBI and the Government should not ignore the concerns and opposition expressed by the Unions and eminent economists or else it will result in more and more scams and looting of people’s money.
Views expressed here are those of C.Srikumar, General Secretary of All India Defence Employees’ Federation and National Executive Committee Member of AITUC