Bank employee organisations cry foul over RBI directive
AIBEA, AIBOC said such decisions can shake depositor confidence. It will put burden on shoulders of "ordinary citizens" and "hardworking bank employees."
Bank employees have opposed a decision by the RBI that allows banks to settle loans of wilful defaulters at their discretion. The All India Bank Officers’ Confederation (AIBOC) and the All India Bank Employees’ Association (AIBEA), both employee organizations, have deemed this decision detrimental. They argue that the decision will adversely affect the banking system of the country. The employee organizations claim that more than 600,000 bank employees are associated with them.
Last week, the RBI issued a circular to all banks regarding the settlement of loans of willful defaulters. According to the circular, defaulters or fraudulent individuals and companies can negotiate settlements with the relevant banks or financial companies regarding wilful default on loans. The RBI circular also stated that any defaulter or company that settles a loan will not be eligible for any further loan from banks or financial companies for at least next 12 months. In other words, after a year, a willful defaulter or fraudulent company or individual will once again be eligible to borrow from banks.
The employee organizations criticized the decision by the RBI, stating that it will encourage those who take loans and commit fraud without repaying them. Additionally, the decision will also betray honest customers who borrow from banks to fulfill their needs and repay the money on time. The employee organizations argue that the RBI’s decision will harm the country’s banking system.
Demand for consideration of the decision
Bank employees say that reaching a settlement for loan waivers with willful defaulters overlooks their wrongful actions and burdens the common citizens and bank employees. Employees have demanded a fresh review of this decision from the Reserve Bank of India (RBI) and have stated that instead of granting concessions to willful defaulters, strict measures should be taken against them. Employees have requested RBI to make the list of all willful defaulters public and to safeguard the interests of honest borrowers and depositors.