July , 2017
NPAs linked to strict provisioning in the sector
14:39 pm

B.E. Bureau

The Bank Employees Federation of India (BEFI) is an important stakeholder in the Indian banking system. It acts as a strong pressure group that advocates the interests of bank employees. It has initiated strong pan-Indian movements against job eliminating schemes and has voiced their demand for adequate recruitment.

BE’s Anustup Roy Barman spoke to Pradip Biswas, General Secretary, Bank Employees Federation of India, regarding the present situation in the banking industry and his organisation’s positioning regarding the issues in the banking industry.


Q. How do you perceive corporate NPA? Can you share with us the percentage ratio of defaulters from the corporate sector as against the general population?

A. A part of the NPAs are created because of the diversion of funds. Around 75% of the total NPAs lie with the corporate sector.

Q. What measures are being taken by banks to tackle stressed assets?

A. Banks are tackling stressed assets by  restructuring loans and by providing further loans.

Q. The Public Sector Banks (PSBs) have faced losses for the first time last year after   nationalisation? What do you think is the reason behind this?

A. The reason lies with huge provisioning related to the rules and regulations pertaining to the sector. This is again being done to mitigate the problem of NPAs.

Q. What will be the result of bank mergers? Will it be profitable?

A. The merger is a move to expedite the process of privatisation. It will not bring any benefit for the people, particularly to the banks’ clientele. Public sector banks are holding around Rs 80 lakh crore rupees as deposits. Around 80% of deposits are accumulation of small savings kept with the PSBs. Contribution of industrial houses in this deposit is negligible.  This is the wealth of the nation and as long as it is with the PSBs, it is under the domain of the state. This can be utilised for people’s welfare, as long it stays with the PSBs. Merger is a step towards privatisation and in the process, this wealth will be transferred to the control of corporates who will utilise this in speculative markets instead of using it for the people’s welfare.

Q. Government is infusing capital in 11 banks but with certain pre-conditions. This was not the case before. What do you think is the reason behind this?

A. The main reason for imposing such conditions is to transfer the burden of NPA on the workforce of the country and on the people at large.

Q. Those banks which are getting the money, they will be under RBI’s prompt corrective action (PCA). What are your views about PCA?

A. Prompt corrective action is the trigger points given by RBI to assess, monitor and control and take action on the functioning of the so-called weak banks. We have to observe the actions taking by the RBI under PCA on the identified banks and can only opine on the subject after a careful review.  

Q. How are you viewing the outsourcing of jobs in banks?

A. We are opposed to outsourcing of normal banking services. Industry level settlements do not permit the banks to opt for outsourcing. We are demanding that all employees engaged by banks through agencies should be absorbed as bank employees. Thereby, they will be paid equally for equal jobs in accordance to the verdict given by Supreme Court.

Q. Over the past ten years, contractual job has increased in banks. What is the future of these workers?

A. Over the last ten years, there has been a manifold increase in the intake of contractual workers in our industry. The future of these contractual workers will be decided through movements demanding absorption and pertaining to a structured and equal pay scale for them till absorption.  

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