The AIBOC in its statement issued on Sunday said that the organization commanding a membership of 3.20 lakh officers is shocked and appalled by the Minister’s biased and misleading statement which tries to deliberately portray the bank officers as the main players responsible for the NPA crisis. The AIBOC has pointed out that the number of delinquent officers, even as per the management estimates are less than 1.5 per cent of the total number of bank officers. Even then, the number is miniscule and the other 98.5 per cent of the officers are hardworking, honest and carrying on their responsibilities despite many constraints.

Mr. Jaitley should have gone in depth into the roots of the crisis and focused on the real factors which have led to high NPAs over the years. Over 75 per cent of the total stock of NPAs is on account of large corporate entities. Such large corporate loans are sanctioned by the top management executives and not the lower rung officers. Big-ticket loans have been mostly sanctioned by the Bank Boards or Committees constituted by the Boards. How many instances are there where the Government has held the members of the Bank Boards and the top management executives responsible for the big ticket corporate loans becoming NPAs? When it is the top management executives who enjoy the lucrative incentives, unmatchable perks, power and authority, should they not be held primarily responsible for the erroneous decisions made by the Bank Boards?

The Bank Boards also have representatives/nominees from RBI, Finance Ministry and others nominated by the Government. Mr. Jaitley does not mention any action being taken against any such Director, holding them responsible for any of the NPAs. Are they not responsible? Is it also not a matter within the knowledge of the Government that RBI wants to withdraw their representatives from the Boards of the PSBs in order to insulate themselves from administrative and credit decisions of the Bank? Is this not another instance of shirking responsibility? The Government has stopped nominating the workmen and non-workmen (officers) Directors on the Bank Boards. Even then, the officers are being given the blame while not a word is spoken regarding the accountability of the Bank Boards.

The AIBOC has been consistently demanding the disclosure of the list of wilful corporate defaulters, in order to name and shame them and to prevent them from doing further damage to the banks. Despite repeated requests and letters addressed to the Reserve Bank of India and to Department, no action has been initiated so far. The decision makers of the Finance Ministry appear to be uninterested in divulging the details, despite being prodded by the Supreme Court and the CIC. No purpose is being served by this non-disclosure other than protecting the wilful corporate defaulters.

Corporate defaulters, economic offenders and fraudsters like Vijay Mallya, Nirav Modi, Mehul Choksey etc. have fled from the country after fleecing the PSBs of thousands of crore. They could run away because of the lapses on the part of the Government and investigating agencies. How many such individuals have been allowed to flee the country?, the AIBOC asks.

According to the AIBOC, the large-scale accumulation of NPAs in PSBs has occurred because of the following reasons:

a. Most of the defaults/delinquencies pertaining to large corporate houses are on account of evil design, misuse of trust and confidence reposed by the banks in their brand value and corporate stature.

b. Large advances are generally made under multiple banking/consortium arrangements, where the loan proposals travel through many pairs of eyes before it is sanctioned. These loans are sanctioned at the highest levels of the individual banks. The possibility of nexus between PSB managements and delinquent corporates need to be probed seriously.

c. As far as bank officers are concerned, they are faced with several handicaps: i) PSBs entered into an arena of Post closure of Infrastructure and Development Institutions viz. ICICI, IDBI etc. with inadequate expertise, exposure and experience in project financing; ii) Misplaced business priorities thrust by the managements; iii) Too much of multi-tasking; iv) Fear of being branded as non-performers; v) Directives of top management on credit decisions; vi) Priority to non-banking activities like cross-selling and vi) Inadequate staffing being the mother of all ills.

It is high time the Finance Minister and the RBI take up seriously the points made by the bank officer’s body. AIBOC and the AIBEA are the organizations which have kept the banking system running despite many lapses by the political masters. Mr. Jaitley must make a through appraisal of the reasons for the crisis rather than blaming officers. (IPA Service)