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Oppn concerned over hike in service tax, lowering interest on deposits

SBI reduced the interest rate on savings bank account to 3.5% from 4 per cent earlier this month

Press Trust of India  |  New Delhi 

Dark clouds seen over the Parliament house during the ongoing monsoon session in New Delhi. (Photo: PTI)
Dark clouds seen over the Parliament house in New Delhi. (Photo: PTI)

Opposition on Thursday expressed concern over an increase in service charges and reduction of on savings account by the SBI, terming it anti-people and saying it will affect over 34 crore customers.

Initiating a debate on the State Banks (Repeal and Amendment) Bill 2017, S P Muddahanumegowda (Cong) said nearly 34 crore people would be affected by the increase in minimum balance.


The Bill seeks to extinguish the existence of five associate banks following their with the from April one this year.

Citing an example, he said "the minimum balance has been raised to Rs 1,000 which has affected the poor and the farmers... (banks) have also put charges on withdrawal ...All these decisions are anti-poor."

He also raised the issue of farmer suicide and deficient rainfall in the southern states particularly Karnataka.

Saugata Roy (TMC) said the has reduced the on savings account to 3.5 per cent from 4 per cent earlier this month.

At the same time, it has also increased the penalty for not maintaining a minimum balance in the savings account, he said, adding that this will harm 31 crore people.

The bad loan level of Rs 1.40 lakh crore which is highest in the banking sector reflects that is badly managed, he said.

Roy said he would like the government to answer about the amount of money collected by the banks during demonetisation.

"Why did Chairman travel with the Prime Minister to provide loan for financing the acquisition of mines in Australia," the TMC leader asked.

When his apparent reference to the recent Rajya Sabha election in Gujarat was met with an uproar from the ruling side, Roy quipped "you should accept defeat gracefully...Jo jeeta wahi Sikander, ye sab ko maan lena chahiye."

Last month, Finance Minister Arun Jaitley had introduced the bill to repeal (Subsidiary Banks) Act and State of Hyderabad Act following the of five associate banks with the parent

"After the acquisition of the subsidiary banks by SBI, the subsidiary banks have ceased to exist and, therefore, it is necessary to repeal the of India (Subsidiary Banks) Act, 1959 and the State of Hyderabad Act, 1956," the statement of object and reasons of the State Banks (Repeal and Amendment) Bill 2017 said.

Five associates and the Bharatiya Mahila became part of of India (SBI) beginning April 1, catapulting the country's largest lender to among the top 50 banks in the world. The five associates that were merged are State of Bikaner and Jaipur (SBBJ), State of Hyderabad (SBH), of Mysore (SBM), State of Patiala (SBP) and of Travancore (SBT).

Following the merger, the total customer base of increased to 37 crore with a branch network of around 24,000 and nearly 59,000 ATMs across the country.

Opposing the Bill, Tathagata Satpathy (BJD) said the acquisition of five associate banks was "a move to hide enormous amount of non-performing assets (NPAs) that these banks have accumulated over the years."

Citing an example, Satpathy said State of Patiala reported a loss of Rs 3579 crore for the quarter ended December 2016 while gross NPA was 23.1 per cent. At the same time, of Mysore reported a loss of Rs 2,600 crore with gross NPA of 25.7 per cent.

He also raised the issue of corporate sector default and "connivance" of some employees in giving loans to the corporates which have turned bad. "If a small villager defaults at Rs 7,000 loan, you confiscate his property," he said.

He also charged BJP of continuing the policy of previous Congress government on consolidation in the banking sector. "Both Congress and BJP are faces of same coin," he said.

Talking about demonetisation, Satpathy said "you have robbed the poor man. Instead of giving Rs 15 lakh you have taken away their money."

Supporting the Bill, Shivkumar Chanabasappa Udasi (BJP) said the Finance Minister should consider proposal for opening brick and mortar ultra small branch in every villages in the country.

Supporting the State Banks (Repeal and Amendment) Bill 2017, Anand Rao Adsul (SS) said the of banks would help in rationalisation of resources, reduction in cost, better profitability and lower cost of funds.

B N Goud (TRS) said the government should be cautious as of banks may lose their regional focus. He also said that poor faced problemd as they do not get loans easily under priority sector lending. Due to this, farmers and poor are forced to borrow from money lenders, he said.

Goud also said that the banks say that politicians do not have credit worthiness. "Do politicians default loans? I do not think so. People who are defaulting, they are getting loans...This malady has to be stopped".

On the other hand, P K Sreemathy (CPI-M) opposed the bill and termed it "anti-people, anti-farmer and anti-employer". empolyees of the merged banks would face problems due to this consolidation. "If this bill does not benefit people, farmers or employees, then why is the government bringing it?"

YSR Congress leader Butta Renuka supported the bill and urged the government to identify more such banks and merge them. "In the process of merger, depositors, borrowers and employees should not be adversely impacted," she said.

She said that NPAs have reached at an unacceptable high levels and some corporates are responsible for this.

Adhir Ranjan Chowdhury (Cong) said the bill was not contradictory to the concept of rationalisation, but the way the government is trying to project itself as if the consolidation will be the panacea to all financial evils.

He also said the government has already decided to merge the banks and now bringing the bill. "This severly erodes the parliamentary authority of the country. Government should correct itself in future," he said.

He added that there was first a need to restore the health of banks and then think of consolidation. "You do all the work outside parliament...That is why we are opposing," he said and alleged that the corporates were using the as a "milching cow".

Chowdhury alleged that a Gujarat corporate house has an NPA of Rs 72,000 crore and the government was waiving that.

T Ravindra Babu (TDP), Prem Singh Chandumajra (SAD) and Abhishek Singh (BJP) supported the bill.

First Published: Thu, August 10 2017. 19:08 IST
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