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Bank unions are not agreeable to some of the conditions the government has set for infusing capital aggregating to ₹8,586 crore in 10 public sector banks.
The conditions include foregoing some of the rights and benefits arising from the industry-wide bipartite wage settlement and tapping the capital market to raise resources.
S Nagarajan, General Secretary, All India Bank Officers’ Association, said: “We are prepared to sign a turnaround memorandum of understanding (with the bank managements and the government) provided whatever suggestions we will be making also find a place in that.”
The 10 PSBs that are slated to receive capital infusion are: Allahabad Bank (₹418 crore); Andhra Bank (₹1,100 crore); Bank of India (₹1,500 crore); Bank of Maharashtra (₹300 crore); Central Bank of India (₹100 crore); Dena Bank (₹600 crore); IDBI Bank (₹1,900 crore); Indian Overseas Bank (₹1,100 crore); UCO Bank (₹1,150 crore) and United Bank of India (₹418 crore). Devidas Tuljapurkar, Joint General Secretary, AIBEA, said banks are insisting on the MoU being signed by March 27, 2017, so that capital infusion can take place before end of this financial year. Among the conditions that the government wants the unions to agree to for infusing capital into the banks pertain to upgrading asset quality (including recovery and reduction in bad loans); optimum utilisation of capital (sale of non-core assets, broad-basing investor base); and improvement in productivity/efficiency (including branch rationalisation).
Elaborating on the conditions that unions want the MoU to reflect, Nagarajan said: “For example, recovery of bad loans cannot be the responsibility of only the officer, manager, senior manager and clerical staff. Big-ticket loans have been sanctioned by the top executives, so they should also be on the recovery drive.” Nagarajan said wasteful expenditure should be totally curbed. “Some of these top executives are running these banks as if it were their personal fiefdom and hold meetings only in 5-star hotels. This wasteful expenditure should be curtailed.
“The banks should thoroughly discuss with the unions the expenditures that need to be curbed. Let the sacrifice proposal be thoroughly discussed so that the banks can be turned around.”
Tuljapurkar said forcing banks to tap the capital market for raising resources at a time when they are weighed down by bad loans and low profitability is a retrograde step.
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