Lok Sabha Polls 2024: Bank Employees Association Urges Election Commission to Bar Willful Defaulters from Contesting

In a move to curb the participation of willful loan defaulters in the political arena, All India Bank Employees’ Association (AIBEA)- the largest union among bankers, has penned a letter to the Chief Election Commissioner emphasising the need for stringent measures to prevent individuals with huge outstanding loans from contesting the Lok Sabha elections. With mounting concerns over the ethical implications and economic fallout of defaulting on bank loans, AIBEA urges the Election Commission to enforce transparency in candidate disclosures and disqualify those with a history of non-repayment.

(AIBEA’s letter to the Chief Election Commissioner.)

Concerns Arise from Public Sector Banking Perspective 

Highlighting the contentious issue of defaulting on bank loans, AIBEA's General Secretary, C.H.Venkatachalam, underscored the adverse impact of allowing such individuals to enter the political fray. In their letter to the Chief Election Commissioner, AIBEA raised alarm over the recurrence of defaulters securing parliamentary seats, drawing attention to the erosion of public trust in the banking system.

The letter delineated the rise in Gross Non-Performing Assets (NPAs) of Public Sector Banks (PSBs) over the years, from Rs. 51,537 crores in 2004 and Rs. 2,16,739 crores in 2014, to Rs. 4,28,199 crores in 2023. The staggering magnitude of NPAs of PSBs reflects the urgency of corrective action to resolve the problem.

(Gross Profits earned by PSBs over the years and the published Net Profits after write-offs/haircuts. Courtesy: AIBEA)

Demand for Accountability

In their letter to ECI, AIBEA demands the commission’s intervention to ensure greater accountability and transparency in details of assets and liabilities furnished by the candidates to keep away willful defaulters of huge borrowings. With mounting losses incurred by PSBs due to write-offs and haircuts, the organisation urged for amendments to the eligibility criteria for candidates to deter willful defaulters and hold them criminally liable for their actions. AIBEA asserted that full disclosure of loan defaults by candidates and provision to  invalidate the candidacy of those implicated in such financial misconduct are crucial to safeguard the integrity of the electoral process. Upholding the principles of financial prudence and ethical governance, AIBEA's appeal resonates with broader concerns regarding the nexus between economic offenders and political influence.

(The beneficiaries of write-offs/haircuts. Courtesy: AIBEA) 

Commenting on the issue, Devidas Tuljapurkar, All India Joint Secretary of AIBEA, also emphasised on the need for accountability to safeguard political integrity. “The corporates are the major beneficiaries of loan write-offs and hair cuts from PSBs, whereas the public pays the toll. This points to unwarranted corporate overpowering, where the economy controls the government, instead of government control over businesses and industries, as it was in the old-days. This change is becoming all the more evident in recent years. That is why we demand the Election Commission to amend the eligibility criteria for candidacy to keep away willful defaulters from contesting elections”, he told Kanal.  

As the nation gears up for the Lok Sabha polls, AIBEA's plea gains significance towards fostering accountability and ethical governance in the political sphere. Keeping willful defaulters away from parliamentary positions would also help reaffirm the common man’s trust in public sector banking.