Budget is a let-down for banking sector, says banks' union

Banks see no drastic measure in Budget to recover bad loans

C H Venkatachalam, general secretary, All India Bank Employees Association (AIBEA) said that Budget  2016-17 is yet another disappointment for banking sector. He said the Finance Minister has not announced any drastic measure to recover the bad loans.

AIBEA has been demanding that government should publish the names of the bank loan defaulters and also give more teeth to the recovery laws but no such announcement has been made in this Budget.

Particularly, the deliberate willful default of bank loans should be treated as criminal offence and criminal action should be taken on such defaulters. But here also, the government has not done anything.

On capital infusion, he questioned, when the PSBs belong to the government, why there should be partial recapitalisation of Banks.

According to Venkatachalam, the Rs 25,000 crores additional capital to PSBs, announced by the Finance Minister, is now sufficient as the actual requirement is said to be more than Rs 2 lakh crore.

"This means remaining capital will be mobilised from private investments including through FDI," said Venkatachalam.

"Thus reiteration that Banks will be under public sector is only a myth and the real agenda is privatisation. This is very clear from the declaration that IDBI Bank will be privatised. This is in negation of all repeated assurances on the floor of the Parliament in the past that IDBI Bank will be in public sector only," he said.

On permitting FDI in the Assert Reconstruction Companies, he said, "This is an undesirable move. This means that bank loans would be sold out at a discount to foreign companies in order to clean the balance sheets".

The union also wants the government to impound Vijay Mallya's passport. Venkatachalam alleged there are reports that Kingfisher's Vijay Mallya wants to leave country without repaying bank dues of over Rs 7,500 crore to 17 Banks.

"His passport should be impounded by the government and he should not be allowed to leave India without repaying the loans," said Venkatachalam.

He added, soft approach to bank loan defaulters and talking of more private capital in Banks only means that the bank loan defaulters can become owners of the Banks.