You are here: Home » Budget » Reactions » Financial Sector
Business Standard

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

Banks see no drastic measure in Budget to recover bad loans

Idbi Bank,banks

BS Reporter  |  Chennai 

PSBs blow Rs 10k-cr hole in LIC books

C H Venkatachalam, general secretary, All India Bank Employees Association (AIBEA) said that 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 .

Read our full coverage on Union Budget 2016

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.

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: Mon, February 29 2016. 18:37 IST