You are here: Home » Current Affairs » News » National
Business Standard

Banks union threatens strike against RBI Internal Working Group proposals

Says depositors lose their savings, wonders whether it is prudent to allow both the lender and the borrower to be owned by the same set of people

Topics
RBI | Banks | Bank Union

T E Narasimhan  |  Chennai 

Bank strike
Venkatachalam alleged that many private banks owned and controlled by corporates and big business houses were mismanaged and failed. Photo: PTI

All India Bank Employees Union (AIBEA) has opposed the recommendations made by the Internal Working Group. The recommendations call for allowing large corporate and industrial houses to promote and permitting promoters to raise their stakes in the bank’s equity share capital from 15 per cent to 26 per cent. They also called for allowing the conversion of large Non-Banking Finance Companies owned by the Corporate Houses into full-fledged and payment into Small Finance Banks.

C H Venkatachalam, General Secretary, AIBDA said all these suggestions and recommendations are retrograde and unwarranted in Indian conditions.

"Our Banks represent Rs 135 trillion of people’s money. is supposed to be the repository of the people’s faith in the banking system but unfortunately, itself is suggesting measures that will endanger the safety of people’s money in the Banks," he said.

ALSO READ: India bans AliExpress, 42 other Chinese apps over security concerns

Venkatachalam alleged that many private banks owned and controlled by corporates and big business houses were mismanaged and failed, and innocent people lost their precious savings. He said scams were reported in the past where bank owners became the borrowers too and looted public money. In the past, many banks controlled by Corporates were catering only to the affluent and common people had no access to banking services.

Venkatachalam added that in the past, when the Government wanted the private banks to participate in the country’s economic development, those ‘patriotic bank owners’ refused to contribute. He also asserted that it is the big corporate and business houses who are the major defaulters, and wondered whether it was prudent to allow corporate houses to own and control banks. "Can anyone agree that the lender (bank) and borrower (corporate house) should be owned by the same people and that it will not lead to conflict of interest and affect good governance," he asked.

"If the Government and the RBI try to allow corporate houses to take over Banks, AIBEA will unleash countrywide agitation and organize repeated strikes," said Venkatachalam, asking the Government to reject these proposals.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, November 24 2020. 20:15 IST
RECOMMENDED FOR YOU
.