Visakhapatnam

‘Heavy haircut’ decision making PSU banks sick, says AIBEA

Fifty three cases referred for settlement, says AIBEA general secretary B.S. Rambabu.  

The ‘heavy haircut’ decision by the BJP-led NDA government in tune with the ‘Insolvency and Bankruptcy Code-2016’ is making profit-making PSU banks sick, All India Bank Employees’ Association general secretary B.S. Rambabu has said.

In a chat with The Hindu, he said now banks were under tremendous pressure to arrive at one-time settlements with big loan defaulters, losing thousands of crores of rupees .

Citing the government statistics, Mr. Rambabu, who is the general secretary of Andhra Pradesh Bank Employees’ Federation, said the NPA amount now stands at around ₹9.55 lakh crore, whereas former RBI Governor Raghuram Rajan had put it at nearly ₹15 lakh crore.

“Big defaulters have referred 53 cases to National Company Law Tribunal (NCLT) for settlement,” he pointed out on the sidelines of a symposium on ‘Cooperative banks: Challenges and Strategies’ organised by Andhra University School of Distance Education in Visakhapatnam.

Referring to Union Finance Minister Arun Jaitley’s move of asking banks to be prepared for ‘heavy haircut’, he remarked: “Whose money is this? The government cannot take such irresponsible decisions.”

Mr. Rambabu further said that go-ahead signal had been given to the Tata’s bid to acquire Bhushan Steel Limited at ₹35,000 crore though the latter had defaulted payment of loans to the tune of ₹60,000 crore, forcing the banks to absorb ₹25,000 crore.

“Similarly, the bid of Mukesh Ambani-led firms to takeover Alok Industries at ₹6,000 crore as against its outstanding loan of ₹36,000 crore has been okayed by the authorities,” he said.

In interest alone, he claimed, the government-run banks would lose ₹1.5 lakh crore to ₹2 lakh crore owing to the ‘corporate-friendly’ policies of the NDA government.

Ill-conceived policies

“Even as the depositors stand to lose nothing, the profit made by the banks will evaporate owing to such ill-conceived economic policies. The RBI will also blacklist the weak banks, putting curbs on the lending capital and opening of new branches,” he observed.

As many as 12 PSU banks including Andhra Bank, State Bank India, IDBI, Indian Overseas Bank, Corporation Bank and Central Bank of India are under severe financial stress owing to writing off bad loans at the behest of the Union government, alleged Mr. B.S. Rambabu .


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Printable version | Jan 19, 2022 5:32:01 AM | https://www.thehindu.com/news/cities/Visakhapatnam/heavy-haircut-decision-making-psu-banks-sick-says-aibea/article25384213.ece

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