Bank officers talk of systemic failure
The resentment among bankers was high as they were being diverted from their core focus.
Coming out in the open against the alleged victimisation of bankers in view of the financial scams, especially the Punjab National Bank ( PNB) scam, that have rocked the country in the recent past, the All India Bank Officers’ Confederation (AIBOC) has said that the government should stop indulging in blame game when bank frauds take place and instead make the Reserve Bank of India (RBI) and the Ministry of Finance accountable and introduce new systems to check systematic failure in bank supervision.
In a statement, D.T. Franco, general secretary of AIBOC, said: “It is a wellknown fact that the SWIFT has been used for frauds from the nineties and there are many reported hacks of SWIFT. Why did the RBI and government not intervene to correct the system? What happened to supervision and audit? Why did the RBI fail in supervision? Is it because the RBI has been busy with other things like demonetisation? They are still counting the notes ever after a year! Has the RBI lost its autonomy?”
In his statement, that is being seen as the first instance of the bankers raising their concerns in view of the attack that they have come from the media and the government for putting the entire blame of the PNB scam on the doorstep of the bankers, the AIBOC said: “Much is talked and written about scams in the banking sector after the Nirav Modi scam in the PNB. Why do the RBI, Ministry of Finance, Central Vigilance Commission (CVC) and others wake up only when a major scam surfaces? Why are we not analysing the failure of the system? What is the role of the government and its policies which cause system failures and scams?”
The AIBOC, which is seen as one of the most important bankers’ union body, also attacked the Chief Economic Advisor, saying “In what way has the Chief Economic Advisor improved the economy? He is talking about privatisation. Does he want to hand over the banks which have been looted by the corporates to them so that they can loot more?”
Bankers whom THE SuNDAy GuArDIAN spoke to said that the resentment among bankers was high as they were being diverted from their core focus. “We do Aadhaar enrollment, we do Jan-Dhan banking, we cross sell bank products, we handle the massive work load that demonetisation has caused; all the while, we are also expected to do core banking and auditing. Cannot the government imagine what are we going through? The PNB scam was a systematic failure, not a human failure,” a scale IV employee of SBI said.
According to another banker who handles high worth loans, the bankers sometimes become helpless in view of political intervention. “In the past, there have been the Harshad Mehta and Ketan Parekh scams and the recent incidents of thousands of crores worth of loans turning into nonperforming assets (NPA). What does the banker do if he is pressurised by politicians to give loans to individuals?” he asked.
The AIBOC, attacking the RBI, said: “Why is the RBI still hesitant to publish the list of defaulters and thus allowing them to run away from the country? Why does the Prime Minister take with him business- men on foreign tours who are known for misuse of the system? Why do the same set of businessmen get contracts abroad? Why are these businessmen show cased abroad and why are they selected by the government to represent private business instead of industry associations, which was the practice earlier?”
As per data shared by the AIBOC in its letter, 11,643 borrowers in the country have availed 38% of the total loans given by banking sector as on March 2016. “Just 12 NPA accounts have an outstanding of Rs 2.50 lakh crore and 84% of the NPAs belong to corporates. Every year, banks are writing off thousands of crores for these corporates, which is the biggest scam. FICCI and Assocham should ask their members to be honest and repay the loans, instead of demanding privatisation,” it says. At the time when Public Sector Banks (PSUs) are facing crisis due to disbursement of insecure loans to industrialists and merchants, the figure shows that from 1 April 2017 to 10 February 2018, the PSU banks rejected 88% of the loan applications filed under the Prime Minister Employment Generation Programme (PMEGP).
In last year’s Budget, the Central government had set a target of providing selfemployment by way of giving loan to 7.5 lakh youth, but from April 2017 to February 2018, the figures show that more than 4 lakh youth applied under PMEGP, but of these only 12% of the unemployed were given loans.
The purpose of the PMEGP is to increase self-employment. Under the scheme, any person above the age of 18 years can avail the loan from the government, ranging from Rs 5 lakh to Rs 10 lakh for the service sector project and from Rs 10 lakh to Rs 25 lakh for the manufacturing sector.
According to the PMEGP portal, from April 2017 to 10 February 2018, as many as 4,03,988 youths applied for loans under the PMEGP. Out of these 3,49,208 applications were placed in front of the District Level Task Force Committee (DLTFC) headed by the collector. The committee found only 2,52,536 applications suitable for recommendation for loan and