The All-India Banks Officers’ Confederation (AIBOC) has said that the asset quality review by the Reserve Bank of India (RBI) may put all public sector banks in the red.
The RBI has recently came out with a policy under which public sector banks in India have been advised to clean their balance sheets and declaring certain accounts as non performing assets (NPAs), which are at present not described as NPA by the banks. This will affect the profitability of public sector banks and many of the banks will be in a loss due to extra provisions on account of newly declared NPAs under the revised policy of the RBI.
Talking to mediapersons here today, Chaman Singla, Joint General Secretary of the AIBOC (Apex), and Rajiv Sirhindi, Secretary of Punjab Unit of the AIBOC, said major trade unions of the country had sent a letter to Raghuram Rajan, Governor, Reserve Bank of India, putting the facts straight and seeking the direct intervention and action by the regulator. If the RBI all of a sudden wants to set right everything overnight, it would be certainly at a great risk of destabilising the banking system in general and PSBs in particular.
They said their serious apprehension, which is subscribed by the market news too, is that a majority of the public sector and few private sector banks would be in red on account of asset quality review by the RBI.
The bank officers said many industrial groups were willful defaulters and the main stakeholder, including the Union Government, was wary of taking any stern action against them.
They said there were apprehensions that the recent steps taken by the Government and the regulators in the name of reforms and international practices would only ensure that private entrepreneurs, both national and international, were handed over the control and management of public sector banks.
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