Officers' union opposes closure of bank branches abroad

Officers' union of public sector banks AIBOC has opposed the decision to close overseas branches in the light of Rs 12,700 crore fraud by billionaire diamantaire Nirav Modi, calling the move a "knee-jerk" reaction.
The All India Bank Officers Confederation (AIBOC) also criticised the knee jerk reaction of the Finance Ministry to all state-run banks to examine all non-performing loans of more than Rs 50 crore for any sign of wrongdoing like symptoms of fraud and also a proposal to establish a National Financial Reporting Authority (NFRA) as an independent regulator for the auditing profession.
Banks have been given 15 days to prepare a so-called 'pre-emptive' action plan to address risks.

"The most shocking part of the story is that the order of Finance Ministry is applicable only to public sector banks and not to the private players. This is beyond our imagination how the government could come to the conclusion that the private sector banks are not exposed to any sort of risk from the defaulters or the fraudsters," it said.
The union in their statement wondered if the government promoting discrimination between the state-run banks and the private banks.
"While there might be cases of fraudulent behaviour, they are not the overwhelming cause for the accretion of NPAs in PSBs. Second, cases of governance breakdowns are not a monopoly of PSBs - globally and in India, many privately-owned banks have been regularly identified with such errors of omission and commissions," it said.

Meanwhile, the Reserve Bank of India today imposed a penalty of Rs 3 crore on Axis Bank for violation of NPA classification norms, and Rs 2 crore on Indian Overseas Bank for not complying with the KYC regulations.

The RBI said it had carried out a statutory inspection of private sector player Axis Bank with reference to its financial position as on March 31, 2016.
It further said, a number of European and American banks in 2008, all privately owned, had to be bailed out by governments.
The list of institutions bailed out included some of the best known brands in the business, it said, adding, closer home, privately-owned Global Trust Bank and Bank of Rajasthan had to be rescued with state support.