AIBEA Writes Against Nayak Committee Report

Canara Bank Employees' Union

CIRCULAR LETTER NO. 27/66/2014/22, 3rd June, 2014

To All Office Bearers / State Federations /
All India Bankwise Organisations/All Units

Dear Comrades,

Our protest against P J Nayak Committee’s recommendations on privatisation of Public Sector Banks – All units to submit memorandum to RBI

Units are aware that the RBI appointed P J Nayak Committee has submitted its report with wide-ranging and serious recommendations some of which are as under:

• Privatise the Public Sector Banks
• Government’s capital should be reduced to less than 50 %
• Merger of Banks
• Design a new governance structure
• Better compensation for Chairman and EDs
• Keep PSBs out of CVC, RTI Act, etc.
• Bank Investment Company should be created under Companies Act which will control the Banks
• The CEO of BIC should be a private equity investment professional
• Ownership of Banks should be transferred to this BIC
• Government should not issue any regulatory instructions to Banks.
• Bank Nationalisation Act should be repealed and Banks should be covered by Companies Act.
• Ownership functions should be handed over by the Government to the BIC
• Government should not appoint any Directors in the Banks. BIC will do that.
• RBI Nominee Directors in the Banks should step down.
• Voting rights should be increased to 26 %

There is no need to explain or elaborate that these recommendations are retrograde and have to be fought back through bitter struggles. 

RBI has invited views and comments on the Report to be submitted to them before 12th June, 2014. While we shall be chalking out our agitational programmes on this issue shortly, we advise all our units – a) State Federations, b) All India Bankwise Organisations, c) all bankwise affiliated units in each State , d) District/Town Organisations, and e) our units from RRBs and Co-operative Banks to send the letter to the RBI as per the draft given herein.

These letters should be sent immediately on receipt of their Circular and copy of the same should be sent to the Central office of AIBEA.
With greetings,
Yours Comradely,

C.H.VENKATACHALAM
GENERAL SECRETARY

From: …………………………………………………

Date : -6-2014
To
Chief General Manager
Reserve Bank of India
Dept. of Banking Operations and Development
12th Floor, Central Office,
Shahid Bhagat Singh Marg,
Fort, Mumbai-400001

Dear Sir,

Our attention has been drawn to the recommendations contained in the P J Nayak Committee’s Report on Governance of Boards of Banks in India. 

The Committee’s recommendations like reducing the Government’s equity in PSBS to less than 50%, Merger of Banks, Design a new governance structure, Keep PSBs out of CVC, RTI Act, Bank Investment Company should be created under Companies Act which will control the Banks, CEO of BIC should be a private equity investment professional, Ownership of Banks should be transferred to this BIC, Government should not issue any regulatory instructions to Banks, Bank Nationalisation Act should be repealed and Banks should be covered by Companies Act, Ownership functions should be handed over by the Government to the BIC, Government should not appoint any Directors in the Banks, RBI Nominee Directors in the Banks should step down, Voting rights should be increased to 26 % , etc. are highly objectionable and unwarranted to the needs and safety of our public sector banks. 

What is needed is strengthening the public sector banks, bringing all private Banks under public sector and enabling banking sector to be engines of economic growth and development. What is needed is strong and stringent measures to recover the huge defaulted loans from the corporate, industrial and business enterprises and not measures to hand over our PSBs to the same private sector. 

We express our strong opposition to the same and demand outright rejection of the Report.
Yours faithfully,

Copy to:
General Secretary,
All India Bank Employees Association,
Prabhat Nivas, 164, Linghi Chetty Street,
Chennai-600001