Bank Unions Will Hold Protest Against Defaulters

Bank union to hold protests against corporate loan defaulters-The Hindu Business Line

CHENNAI, MAY 7:  

The All India Bank Employees’ Association (AIBEA) plans to stage protests in front of the corporate premises of loan defaulters of public sector banks. The association will decide on dates once the general election results are declared.

Announcing this at a press conference , CH Venkatachalam, General Secretary of the association, said the initiative is to register “our voice against the daylight robbery by big corporates”. There has been an alarming increase in bad loans with public sector banks, and “we demand stringent measures to recover them”, he said.

AIBEA represents more than five lakh employees in public and private sector banks. It also released a list of top 400 defaulters with dues ranging from a few crore rupees to a few thousand crores. Total bad loans from these borrowers exceed ₹70,000 crore, according to the list.

According to Venkatachalam , the total NPAs of public sector banks as on March 31, 2013 stood at ₹3,25,000 crore and the restructured portfolio of these banks stood at ₹2,36,000 crore.

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AIBEA demands detailed probe of top 400 bank loan defaults

In view of the rising bad loans in state-owned banks, the AIBEA said the RBI should periodically publish the list, the union government should amend recovery laws and take criminal action against wilful defaulters

The All India Bank Employees' Association (AIBEA), while revealing wilful defaults worth Rs70,300 crore in 400 loan accounts in public sector banks (PSBs), has demanded adetailed probe in to the loan sanctioning and loans turning into bad assets.

“Why these loans are not coming back? Who is responsible and accountable? If the bank executives have given the name, let there be a probe. If there is a political nexus, let it come out. Country should not be for somebody’s default. People should not be punished for corporate default,” said CH Venkatachalam, general secretary of AIBEA in a statement.

According to the bank employee's union, over the past seven years, there are fresh bad loans worth Rs4.95 lakh crore only in PSBs, while during the same period, these lenders wrote off bad debts worth Rs1.4 lakh crore. Gross non-performing assets (NPAs) and bad loans in the PSBs have increased to Rs1.64 lakh crore as on 31 March 2013 from Rs39,000 crore as on 31 March 2008.

AIBEA also launched a nation-wide campaign that stresses on three key point, like the Reserve Bank of India (RBI) should periodically publish the list, the union government should amend recovery laws and take criminal action against wilful defaulters.

Earlier in December, the bank union had pointed out that the top four bad loan accounts add up to a massive Rs22,666 crore, which include Kingfisher Airlines and Winsome Diamond and Jewellery Co. The Vijay Mallya-owned and now defunct carrier is the biggest defaulter and owes Rs2,673 crore to PSBs. Mumbai-based Winsome Diamond and Jewellery Company (erstwhile Su-Raj Diamond India Ltd), with dues of Rs2,660 crore, is the second highest defaulter, followed by Electrotherm India Ltd at Rs2,211 crore, the union said.

Some of the other big-ticket defaulters include, Zoom Developers Pvt Ltd (Rs1,810 crore), Sterling Biotech Ltd (Rs1,732 crore), S Kumars Nationwide Ltd (Rs1,692 crore), Surya Vinayak Industries Ltd (Rs1,446 crore), Corporate Ispat Alloys Ltd (Rs1,360 crore), Forever Precious Jewellery and Diamonds (Rs1,254 crore), Sterling Oil Resources Ltd (Rs1,197 crore) and Varun Industries Ltd (Rs1,129 crore).

In addition, the bank employee association also wants responsibility fixed on banks’ top brass for the loans that have turned bad, allow banks to share information on NPAs and wilful defaulters under the Right to Information (RTI) Act, and declare wilful loan default as a criminal offence.

Pointing out that the credit appraisal committees of public sector banks had powers to sanction single loans up to Rs400 crore in the case of large banks and up to Rs250 crore in the case of small banks, Vishwas Utagi, General Secretary, Maharashtra State Bank Employees Federation, an affiliate of AIBEA, had alleged that promoters of large defaulting companies diverted bank loans into real estate and floated cricket outfits for competing in domestic league matches.

Speaking with reporters in Mumbai, Mr Utagi alleged that NPAs of banks were the money fraudulently siphoned off from the banking system. Demanding strong legal remedies by the government and the regulators to redeem these public funds, he said, “Banks are dealing with the hard-earned savings of the people, and today the total deposits in banks in India have crossed Rs75 lakh crore.”

According to the Union, over the past seven years, there are fresh bad loans worth Rs4.95 lakh crore only in PSBs, while during the same period, these lenders wrote off band debts worth Rs1.4 lakh crore. Top four defaulters of state-run banks constitute Rs23,000 crore of NPAs, the AIBEA had said.

In order to highlight the increasing bad loans or non-performing assets (NPAs) menace in PSBs, the bank employees observed 5 December 2013 as 'All India Demands Day' by wearing badges and holding rallies.
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