Aiboc Against Rbi Probe

Recently, Aiboc chairman R N Godbole held RBI and Union finance ministry responsible for what happened in Indian Bank, which showed huge losses and its entire networth eroded, as their nominees were there on the board of the bank.

He wanted the board of directors, supervisory wing of RBI and officials monitoring the banking system in finance ministry be named as accused for the grave situation Indian Bank finds itself in now.

Godbole said it is highly unjustifiable for the government to ask the finance ministry and RBI, which are co-accused in the case.

He said the Janakiraman committee had pointed out the lapses and grave ommissions committed by the RBI in its public debt office (PDO) and the department of banking operation in the securities scam of 1992.

 

The confederation demanded that consumer organisations, depositors and other persons interested in healthy banking should be allowed to participate in the proceedings.

Aiboc chairman has demanded that net asset value should be used as the criteria while fixing the premium for the forthcoming IPO of public sector banks.

He said before embarking on this exercise, the government should ensure the assets of these banks be revalued to add free reserves and the premium to be collected by these banks to the governments equity. Why force entire population of the country to sacrifice for the sake of making a few hundred future investors in the equity of these banks.

Godbole said: If at all, the losses were allowed to be written down, the government should separate funds used for making provisions for bad and doubtful debts to arrive at net loss, if any.

Referring to the applications pending before the Union government by two public sector banks - Dena Bank and Bank of Baroda - for a premium public issues, Aiboc chairman said the government and the RBI should complete a proper accounting of assets to get the real picture. He said on September 30, these two banks had non-performing assets worth Rs 153.33 and 218.93 crore, respectively.