• Rajasthan

    Cong 100
    BJP 73
    RLM 3
    OTH 23
  • Madhya Pradesh

    Cong 114
    BJP 107
    BSP 2
    OTH 7
  • Chhattisgarh

    Cong 63
    BJP 18
    JCC 9
    OTH 0
  • Telangana

    TRS-AIMIM 94
    TDP-Cong 22
    BJP 1
    OTH 2
  • Mizoram

    MNF 26
    Cong 5
    BJP 1
    OTH 8

* Total Tally Reflects Leads + Wins

Surprise move: RBI staff union backs Governor Urjit Patel for work on solving bad loan, PSB problems

By: | Published: June 15, 2018 8:13 PM

The employees union of the Reserve Bank has, in a surprise move, backed governor Urjit Patel's for his stern action to stem the bad loan problem and other ills plaguing the public sector banks, and urged him, in a letter, to continue to actively monitor banks as an 'alert inspector' and not just as an 'off-site surveyor'.

Urjit Patel ,RBI, RBI staff union, bankruptcy courts, delhi high court, Nirav Modi , PNB scam, PSB On the PNB scam, the unions said if the RBI believes that banking authorities are responsible enough to mind their operations and RBI can safely rely on them that will definitely be a dereliction of duty. (IE)

The employees union of the Reserve Bank has, in a surprise move, backed governor Urjit Patel’s for his stern action to stem the bad loan problem and other ills plaguing the public sector banks, and urged him, in a letter, to continue to actively monitor banks as an ‘alert inspector’ and not just as an ‘off-site surveyor’. The union support has come as a letter to the governor yesterday from the All-India Reserve Bank Employees Association. The move also comes within days of the bank officers unions moving the Delhi High Court challenging the RBI decision to ask banks to refer the 40 largest dud loan accounts to the bankruptcy courts, saying the move will wipe out banks balancesheets which may also have a cascading impact on their jobs.

These 40 accounts constitute over 40 per cent of the dud loans in the system. Earlier this week, the RBI governor had appeared before a Parliamentary panel where he had reportedly made a strong case for more powers to effectively regulate public sector banks. To a query from panel members on the Rs 13,500-crore fraud committed by diamond merchant Nirav Modi and his associates at the Punjab National Bank, the governor had reportedly said it was impossible to look after each and every branch for audit purposes.

“You have stressed that it is not possible for RBI to inspect/audit the 1,20,000-odd bank branches spread over the whole country. That is unexceptionable. But that should not mean that RBI will totally withdraw itself from on-site supervision and rely on reports sent by banks taking those as sacrosanct,” the All-India Reserve Bank Employees Association said in a letter to the governor.

On the PNB scam, the unions said if the RBI believes that banking authorities are responsible enough to mind their operations and RBI can safely rely on them that will definitely be a dereliction of duty. “So, we strongly feel that RBI must remain in the scene, not only as an off-site surveyor but an active and alert inspector,” the letter, dated June 14, said.

The union has also suggested that RBI to undertake random but periodic supervision of bank branches across the country covering at least 10 per cent of branches across the regions on an annual basis. Monitoring of banks by RBI should be a triad — a combination of risk-based supervision, off-site surveillance and random on-site inspections of operational systems, the letter said.

“We feel this will give the best result instead of RBI totally dispensing with on-site inspections,” the unions said. The letter said the RBI could train newly recruited computer-savvy assistants in banks for helping it in this monitoring exercise, which will stand RBI in good stead without stretching its human resources too much.

Patel reportedly told the House panel, headed by Congress leader Veerappa Moily that the RBI has “inadequate” control over public sector banks and asked for more powers to regulate them. He cited 10 areas like no powers to remove chairmen/directors/CEOs of state-owned banks and also its inability to impose restrictions on common directors on their boards, among others, where RBI has no control over PSBs.

The union has thanked Patel for bringing to the fore regulatory impediments that RBI is facing in regard to public sector banks. They also praised him for putting forward that banking regulation and supervision should be “ownership neutral”.

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