Andhra Pradesh : IBC a method to loot public money: AIBEA

With photo

All India Bank Employees’ Association general secretary Ch. Venkatachalam has said that the Insolvency and Bankruptcy Code (IBC) has become a method to loot public money for the last six years, as the banks were incurring massive ‘hair cuts’ , while the defaulters escaped without any penal action and other corporate companies took over the loans at cheap rates.

The total gross operating profit of public sector banks at the end of March 2021 was ₹1,97,376 crore, but the net profit came down to ₹31,817 crore as a whopping ₹1,65,559 crore was provided for bad loans and write off of bad loans, he stated.

In the city to participate in the 36th triennial conference of the Central Bank of India Employees’ Association (CBIEA) and 12th triennial conference of the Central Bank of India Officers’ Union (CBIOU) here on May 1, Mr. Venkatachalam told the media on Saturday that instead of recovery, the loans were being sold to other companies at cheap rates, resulting in huge losses to the banks.

Bad loans were a major problem faced by the banks, which had been demanding action to recover such loans, but the Central government was instead giving the defaulters various concessions, he said.

Mr. Venkatachalam said, on the other hand, the Centre proposed to privatise the PSU banks, which had resolved to go on intensified strikes if the privatisation move was not given up. He observed that post-nationalisation, banks had made a tremendous contribution to the country’s economic development, whereas several private banks had collapsed due to mismanagement. The total deposits of PSU banks stood at ₹160 lakh crore and the loans amounted to ₹110 lakh crore, he pointed out.

Further, Mr. Venkatachalam faulted the Central government’s anti-labour policies which, he said, resulted in a major loss of jobs, underpayments, closures and lockouts, retrenchment etc. Unfortunately, there was no scheme to rehabilitate these lakhs of job losers.

AIBEA secretary B.S. Rambabu, CBIOU chairman G. Shyam Babu and general secretary P.S.P.V. Phani Kumar, CBIEA president Y. Srinivasa Rao and general secretary P. Uday Bhaskar were present.