The All India Bank Employees' Association (AIBEA) is planning to observe December 5, 2013, as the All India Day, demanding a remedy for increasing bad loans.
The body alleged the significant increase in bad loans in the public sector banks (PSBs) was due to big and corporate borrowers.
According to them, the bad loans in the PSBs rose from Rs 39,000 crore in March 2008 to Rs 1,64,000 crore in March 2013, and the bad loans restructured and shown as good loans accounts to Rs 3,25,000 crore. Of the restructured loans, corporate borrowers accounted for Rs 2,70,000 crore.
Bad loans worth Rs 1,41,295 crore have been written off during 2007 to 2013 and most of these were in the favour of big defaulters and corporate borrowers, it alleged.
"If we include bad loans in the private banks and foreign banks and other financial institutions, the total bad loans amount to more than Rs 2,50,000 crore," an AIBEA leaflet stated.
CH Venkatachalam, general secretary, AIBEA, said the association would release names of the top defaulters in a press meet on December 5 as part of its protest.
It would also conduct demonstrations in various parts of the country raising six demands --- to publish a list of bank loan defaulters of Rs 1 crore and above, make willful default of bank loan as a criminal offence, order investigation to probe nexus and collusion, amend recovery laws to speed up recovery of bad loans and take stringent measures to recover bad loans. It also demanded not to incentivise corporate delinquency.
The provisions made for bad loans from the profits earned grew from Rs 11,121 crore in 2008-09 to Rs 43,102 crore in 2012-13, accounting to a total of Rs 1,40,266 crore as provisioning in the five years. Between 2008 and 2013, gross profit of banks before provisions for bad loans was at Rs 3,58,893 crore. Of this, Rs 1,40,266 crore was moved to provisions, leaving them with a net profit of Rs 2,18,627 crore.
Meanwhile, with the falling provision coverage ratio, a majority of the banks are becoming vulnerable and susceptible to risks against loan losses. As against a provision coverage ratio of 68 per cent as on March 31, 2012, it dropped to 62 per cent by March 31, 2013.
"According to the RBI, the provision ratio in the entire banking system fell from 55 per cent to 45 per cent while the global average is 70 to 80 per cent," it said.
The association'0s list of non-performing asset (NPA) provision coverage (which is the ratio of provisions made against gross NPA) showed the coverage ratio for Allahabad Bank and Andhra Bank drop from 74 and 71 per cent as on March 31, 2012, to 50 per cent each as on March 31, 2013. Bank of Baroda had a coverage of 80 per cent as on March 31, 2012, which came down to 68 per cent as on March 31, 2013, according to the data.
