All India Bank Employees’ Association (AIBEA) has urged Finance Minister Arun Jaitley to see that banking be made a fundamental right and the rate of interest on Savings Bank Deposits revised upwardly by at least two basis points to encourage and incentivise domestic savings.
In a letter to Mr Jaitley, for providing AIBEA suggestions to consider in the next Budget 2018, itsGeneral Secretary Ch Venkatachalam on Saturday said the interest on Fixed Deposits should be increased and exempted from the purview of Income tax.
He said Banks should extend agriculture loan at the rate of 2 per cent per annum (simple). For very poor and marginal farmers, it should be interest free and added there should be a revival of Differential Rate of Interest Scheme for extending loan to low income groups at the rate of 4 per cent per annum (simple).
The Banks should extend education loan at concessional rate of interest to the poorer sections of the people at the rate of 5 per cent per annum (simple) with interest subvention he said and added that the Banks should be advised to further extend the holiday period in case of students, who could not get their employment subsequent to their completing the course, by another 12-24 months depending on a case-to-case basis.
Mr Venkatachalam said all Private Sector Banks should be brought under the Public Sector,the Government should hold full control of public sector banks with 100 per cent equity holding and should not disinvest its shareholding.
To immediately tide over the crisis of capital in public sector banks, the Government, being the single largest owner, should provide adequate and hassle-free capital infusion to the banks.
Willful default of bank loans should be declared as a criminal offence through suitable amendment to law, the AIBEA General Secretary maintained and said Non-Performing Assets of the Banks have risen phenomenally and hence, the Government should institute more Debt Recovery Tribunals and Fast Track Courts to recover the high volume bad loans.
The Reserve Bank of India should be empowered to publish the list of defaulters, who owe to the banks more than Rs.1 crore and this defaulters list should be published every six months with updates, he said.
He said Willful bank loan defaulters should be prohibited from contesting in the elections, local body or Legislative Assembly or Parliament or to hold any public positions.Such of those persons, who hold high offices and whose names figure in the defaulters list, should be asked to relinquish their positions.
Fast track courts shall have to be vested with more powers to recover the bad loans and stringent laws should be enacted to ensure more recovery and Banks should be advised to institute separate vertical, headed by General Manager, for recovery of “Prudentially Written Off/Technically Written Off” accounts.
Mr Venkatachalam said in his letter that the details of such recovery should be placed before the Boards of the Banks and submitted to the Ministry of Finance on a quarterly basis, Laws should be amended to confiscate the assets of the Directors in case of default by a Company, in which they are Directors by suitably amending the Companies Act.
A system to be evolved to ensure accountability and responsibility on the part of the Managing Directors & CEOs/CMDs/Executive Directors of the Public Sector Banks in respect of sanction of credit, which ultimately falls into distressed assets/quick mortality cases, he said Periodical review should be made to identify the persons whose debts/loans availed from the banks were written off with interest, There should be a strict supervision on corporate houses, who resort to External Commercial Borrowings, to ensure that the rules/guidelines envisaged by the Government are strictly adhered to instead of diversification.
The top Union leader said RBI should stop issuing licenses to private corporates to open banks and On Tap Licensing Policy should be scrapped.
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In the interest of the rural population and to ensure proper rural credit, Mr Venkatachalam said the infrastructure of the Regional Rural Banks shall be utilized by merging them with the sponsor banks.Co-operative banking institutions should be strengthened and recapitalised by collective mechanism of funding them by both Central and State Governments by fully implementing the recommendations of Vaidyanathan Committee. A separate Recapitalization Fund be created in the budget for this purpose.There should be expansion of public sector banks and to that effect, more branches should be opened in unbanked and rural areas.
Hence, there should not be merger and consolidation of public sector banks the top Union leader contended.
An announcement to be made in the Budget on reimbursement of cost of demonetisation and other Government Schemes to Banks by the Government. Banks should not pass on the burden of corporate NPAs on bank customers by hiking charges and the increase Service Charges made in the name of GST should be reversed, the AIBEA General Secretary