Following is the news items which really gives pleasure in reading that at least bank union AIBOA has also understood the gravity of the critical situation of public sector banks and has written to President of India. This is of course a good beginning of realization of the sickness of the system . God knows how far President of India will take it seriously because a s a person he hails from same corrupt stream which gave birth to corrupt system. But the step is commendable.
AIBOA seeks President's intervention to save Indian banking system-Hindu Business Line-06.04.2014
COIMBATORE, APRIL 5:
The All India Bank Officers' Association has sent an SoS to the President of India praying for his immediate intervention to save the Indian banking system from further collapse and for restoring the health of the banking industry.
Banking audit commission
Voicing concern over the rising incidence of bad loans in the banking system, AIBOA General Secretary S Nagarajan has in the communication stressed the need for a 'Banking Audit Commission' on the lines of CAG (Comptroller and Auditor General of India) for the entire banking system.
The association has suggested the need for entrusting the responsibility of auditing the accounts of public sector banks to an external authority/ committee with members of proven integrity and moral standing.
"This audit should be done for the just-ended fiscal and within a fixed time schedule. The report should be submitted to the President,'' Nagarajan told Business Line, adding 'the mess in which we are today is not because of something that has happened in the recent past. It started in the early 90s.''
"The Chairmen, who were responsible for conduct of affairs since 1993, and due to which the present has arisen should be made accountable,'' he said.
Large loan proposals
Large loan proposals are at present considered by a committee consisting of general manager's of the bank.
Endorsing the RBI's observation on committee method of sanctioning loans, the association has sought to make every member of the committee accountable together with the Chairman, the Government representative and the RBI representative for their failure to check the deviation during their tenure and as a result of which such sanctions had turned out to be bad.
Urgent steps need to be taken to declare defaulters with sufficient resources to clear their bank dues as "wilful defaulters under criminal procedure code'', the AIBOA General Secretary said, seeking an amendment to the definition of "wilful defaulters'' to include diversion of bank funds for acts other than the one for which it was availed.
Amendment to company law
The association has also sought suitable amendment to the Company Law such that the CEO or promotee director of the defaulting company cannot be made director of any other company..
The People's Representation Act 1951, should prohibit bank loan defaulters from contesting in the election, at any level, the association said.
Sharing bank-wise details of bad loans and the amounts written off by the banking system year-after-year since 2007, Nagarajan appealed to the President to urge the Indian Banks' Association to publish the caution list on a bi-monthly basis for the benefit of member banks.
On a parting note, he said: "We can't afford to to let this go lightly any more.''
Wow great realisation atlast...
ReplyDeleteFor eg. If there is a due for tax liability govt of can arrest and send them behind bars though its a meager amount. At the same time if it comes to banks turn though its huge huge huge, cannot take any action against them. Even banks dont have rights to publish their names and photos. Funny system. Paggy laws.
Good initiative by the AIBOC.If the RBI/Govt. appoint audit commission the things will be clear and the hurdle in wage revision due to bad loans as per opinion of Mr.P.Chidambaram wil be clear.Bad loans are not due to bank employees.
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