AIBEA Urges Govt. for Recruitment in Banks and Action on Loan Defaulters, Plans Agitation

The All India Bank Employees' Association (AIBEA) has expressed serious concern over the lack of adequate recruitment in public sector banks and the increasing leniency toward large corporate loan defaulters. In a press release dated 20th October 2024, AIBEA General Secretary C.H. Venkatachalam urged the government to prioritize filling vacancies in banks and take immediate action to recover bad loans. The AIBEA has announced its decision to launch a nationwide agitation, including strikes, if these issues are not addressed.

(The statement from AIBEA General Secretary C H Venkatachalam.)

Inadequate Recruitment in Banks: AIBEA Raises Alarm  

C.H. Venkatachalam highlighted that recruitment in banks has slowed down over the years, with more than one lakh vacant posts remaining unfilled. He emphasized that this shortage of staff is significantly affecting customer service and efficiency in public sector banks (PSBs). "Banks are meant to serve the people. For serving the people, banks should have adequate staff," said Venkatachalam.

AIBEA has strongly opposed the growing trend of outsourcing permanent jobs in banks on a temporary or contractual basis, arguing that this practice undermines the quality of service and employee security. "Instead of filling these vacancies, banks are trying to outsource these permanent jobs on a temporary and contract basis. We strongly oppose the same," he added. AIBEA has decided to launch a countrywide agitation, including strikes, to demand adequate recruitment in the banking sector.

Rising Bad Loans: A Call for Strict Recovery Measures  

Another major concern raised by AIBEA is the increasing number of non-performing assets (NPAs) and bad loans in the banking sector. Venkatachalam pointed out that the bulk of bad loans come from large corporate defaulters, who often receive concessions while ordinary borrowers face stringent recovery measures.

He criticized the current policies that allow banks to write off huge amounts of corporate debt, which he believes is a significant loss for the banking sector. "While coercive methods are used to recover small loans from ordinary borrowers, large corporate defaulters are dealt with leniently. Huge loans given to private companies are being written off, resulting in massive losses for the banks," Venkatachalam said.

AIBEA has demanded that the government take stricter action against corporate loan defaulters and publish the list of defaulters to ensure transparency. The union also highlighted the ongoing losses incurred by banks due to write-offs, calling for an immediate stop to the practice.

(Write-offs to big defaulters as per AIBEA press release.)

Haircuts and Write-offs: The Numbers Tell a Grim Story  

The press release provided detailed data on loan write-offs and the losses incurred by banks due to large corporate defaulters. For example, loans totaling ₹91,000 crore owed by DHFL were settled for ₹37,000 crore, resulting in a 60% "haircut" for the banks. Similarly, Bhushan Power's loan of ₹48,000 crore was settled for ₹19,000 crore, a 60% reduction.

(The rise in Gross NPA over the years. Rs. in crores. Courtesy: AIBEA press release.)

These instances, AIBEA argued, demonstrate how banks are taking significant losses, which ultimately affects their ability to serve the public and remain financially stable. "Banks are incurring losses due to such loan write-offs. We oppose these concessions to big loan defaulters," he stated.

(Bad loans written off over the years. Rs. in crores. Courtesy: AIBEA press release.)

In light of these concerns, the AIBEA has urged the government to take immediate action. If there is no response, the union is prepared to launch a nationwide agitation, including strikes, to demand adequate recruitment in banks and stricter recovery measures for bad loans.

(In their press release, AIBEA raises the question ‘how so many companies are taken over by Adani?’) 

"We have decided to launch a countrywide agitation including strikes to demand adequate recruitment in banks and action against loan defaulters," Venkatachalam concluded, reinforcing the union's commitment to addressing these critical issues.