• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Our Bureau

KOCHI, Dec.1

EXPRESSING concern over the alarming proportion of non performing assets in the banking industry, the All India Bank Officers' Association (AIBOA) has urged the Union Government and the Reserve Bank of India to take immediate steps to safeguard the interest of bank depositors and the investing public.

Addressing a press conference here on Saturday, the Association General Secretary, Mr R.J. Sridharan, said that only less than Rs 5,000 crore out of Rs 1,10,000 crore NPAs were recovered in the last eight years and the Government should declare a total war on NPAs as the situation called for steps on a war-footing.

Alleging that RBI and the Government so far had lent a deaf ear to the growing problem, he pointed out that NPAs had steadily grown from Rs 37,500 crore in 1991-92 to the level of Rs 1,10,000 crore.

Of this, big borrowers in about 11,000 individual accounts constituted about Rs 40,000 crore, he said and added that AIBOA strongly opposed to discount sale of big loans through the medium of Asset Reconstruction Companies (ARC).

AIBOA demanded declaration of list of big defaulters of Rs 10 lakh and above in all the banks including public, private and developmental financial institutions. The list should be published at every district level in all the local newspapers.

There should be immediate recall of nominees of RBI and Government from the bank boards and the functional autonomy should be given to the banks, he said and called upon the Government for the formation of an independent Central Monitoring Authority for the banks.

According to Mr Alok Khare, All India President, the present policy on interest structure was biased against the poor and saving public as it was loaded unduly in favour of big borrowers. While deposit rates had been brought down by three percentage points over the last five years, interest rates for loans have been slashed for corporate and big borrowers by about eight percentage point in the last seven years.

This had resulted in loss of legitimate interest income for the banks to the extent of Rs 50,000 crore in this period, he added.

AIBOA therefore urged RBI and the Government to review their interest rate policy and protect small depositors with increased interest rates in public sector banks due to the collapse of private mutual funds, NBFC, UTI and other agencies.

Send this article to Friends by E-Mail
Comment on this article to BLFeedback@thehindu.co.in

Stories in this Section
The balance of payments myth

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line