Unions blame CII for creating huge NPAs

Unions blame CII for creating huge NPAs
ENS ECONOMIC BUREAU

MUMBAI, DECEMBER 17: The banking sector and the industry seem to be on a war-path. The All India Bank Employees' Association (AIBEA) has said the Confederation of Indian Industry's (CII) suggestion to close down Uco Bank, United Bank and Indian Bank was a "malicious" move by an organisation "representing bank loan defaulters" who have defaulted loans of over Rs 30,000 crore to these banks.

Unions have urged the government to publish the list of defaulters and take stringent measures for recovery of bad loans including "wilful default" of bank loans. ``A number of CII members had taken loans and defaulted. CII would do well to ask its members to repay outstanding bank loans,'' it said.

"If more than Rs 58,000 crore of bad loans are due, the major share is from the private corporate sector. If these loans are repaid, banks will be running on their own steam and be healthy again," said a statement.

Samir Ghosh, general secretary of the All India Reserve Bank Employees' Association (AIRBEA), said CII'ssuggestion is "preposterous". He added that AIRBEA had already communicated to the deputy governor of RBI, SP Talwar, to immediately assure bank clients about the safety and security of their bank deposits.

He claimed that a large chunk of the huge unrecovered advances of these banks were due from big business groups, some of which are the "promoters and spokesmen of organisations like the CII. He maintained that the suggestion for closure of these banks was intended to cover the "misdeeds" of persons/groups owing allegiance to organisations like CII.

AIBOC General Secretary S R Sengupta said CII has been behaving in a manner as if it runs the government. ``They must understand that they are a club of industrial houses and they have no right to talk on policy issues of government of India,'' he said.

He said these industrial houses owe Rs 30,000 crore to nationalised banks and were taking all measures how not to pay back the dues which were nothing but people's savings. ``If the members of the CII andother industrial clubs would have repaid Rs 30,000 crore back, the health of public sector banks would have been far better than those in other countries,'' Sengupta said.

Condemning such a statement, he said the CII suggestions were aimed at weakening these banks by creating a fear psychosis amongst depositors.

UCO Bank chairman and managing director Sharda Singh on Thursday blasted the CII report that has called for the closure of three banks with huge non-performing assets. Singh had said the CII national task force on NPAs in the Indian financial system had five members whose group companies had outstandings to government-owned banks.

"It is strange that among the CII group's members, there are five top industrialists who had helped to increase the NPAs of banks," Singh said. The defaults were to several nationalised banks and not just Uco. He refused to name the defaulters among the 15-member group. "They carry no credibility and nobody -- not even the finance ministry -- will give any importanceto this report," Singh said.