The United Forum of Bank Unions (UFBU), the representative body of nine bank unions, on Friday urged Finance Minister Arun Jaitley to immediately drop plans for any mergers or consolidation of banks, stating that the country needs expansion of the banking system, not consolidation.
This was among the several suggestions made to Jaitley when a UFBU delegation called on him at North Block here.
The UFBU also took out a morcha to Parliament House, opposing the reforms pursued by the Centre in the banking sector.
“We have emphasised that the Centre should reconsider the plans of merger and consolidation of banks. If banks are made bigger by merger, there is no guarantee that big banks will be strong banks,” CH Venkatachalam, General Secretary, All India Bank Employees Association (AIBEA), told BusinessLine after the UFBU members met Jaitley here.
The UFBU had conveyed to Jaitley that wilful default should be considered a criminal offence and suitable criminal action should be taken against defaulters, he added. Also, the RBI Act should be amended to provide for the publication of the names of such defaulters.
Among those present at the meeting were Sanjeev Bandlish, Convenor, UFBU; S Nagarajan, Secretary General, All India Bank Officers Association (AIBOA); and D Raja, Member of Parliament.
The UFBU has also requested the Centre to withdraw the Bill on the insolvency regime for financial firms, calling the proposed law “draconian”.
In a memorandum submitted to Jaitley, the UFBU suggested that corporate non performing assets (NPAs) should be recovered and not written off.
It was also suggested that the Centre should not allow banks to pass on the burden of corporate NPAs on bank customers by hiking charges. The UFBU delegation stressed the need for the government to accept and implement the recommendations of the Standing Committee on Finance to ensure better recovery of bad loans. A case was also made to ensure accountability of top management/executives for the bad loans and put in place stringent measures to recover such loans.