Aiboc Wants Brass To Be Liable For Sticky Assets

Bank officers want legal reforms to make the promoters/ directors of banks personally liable for the outstandings (non-performing assets or NPAs) in accounts.

Mere setting up of asset reconstruction companies (ARCs) to recover NPAs will not work as it will help the big corporates and the big fish among the defaulters to get away with huge dues, according to Shantha Raju, president of the All India Bank Officers' Confederation (Aiboc).

Shantha Raju, now here to attend a state general council meeting of the Aiboc, was commenting on the proposal to amend the Banking Regulations Act in the current session of Parliament for diluting government holding in the equity of banks to less than 51 per cent.

 

The Aiboc chief said the staggering Rs 58,000 crore of NPAs was a serious matter, but wondered if privatisation or setting up the ARCs were the solution.

He said it is the rural masses, especially those below the poverty line, who would be most affected if banks were privatised. It was the priority lending by the nationalised banks that helped the country achieve green revolution and "operation flood" which benefited the farmers. This contribution by the public sector banks over the past four decades should not be lost sight of.

Shanta Raju also warned the government that its move to bring changes in the Trade Unions Act and enact an industrial relations law "would create serious industrial unrest in the country".

He wanted the government to discuss the proposed changes in labour laws with the trade unions and then only make changes. It should not "buckle" under pressure from the industrial lobby, he said.

The Aiboc chief was also critical of the delay in filling up vacant posts of officer-directors on the boards of several banks. Some of the recent changes in the functioning of the boards have reduced the employees' representatives on the boards to "passive nominees".

He asked the government to review the entire functioning of the boards and initiate corrective steps.