Kerala - Kollam   

`Make default in loan repayment a criminal offence'

By Our Staff Reporter

KOLLAM, JAN. 23 . The secretary of the All India Bank Employees Association (AIBEA), C.H. Venkatachalam, today said default in repayment of bank loans should be made a criminal offence instead of civil offence as at present.

He was inaugurating the 21st All India conference of the Federal Bank Employees Union here.

Mr. Venkatachalam said the decision of the Central Government to allow 74 per cent Foreign Direct Investment (FDI) in private sector banks would be strongly opposed. "The 74 per cent FDI decision is nothing but an open invitation to foreign capital to swallow up the private banks in the country. Indian private sector banks, though small in size, have been age-old institutions catering to the needs of our economy in their own way," he said. If at all such banks have to be strengthened, the Government should nationalise them and integrate them with public sector banks, he said.

He said the Central Government move would only make private banks more vulnerable to manipulation by vested interests of foreign capital. He alleged that the same was tantamount to caving in to the dictates of international agencies that were out to ensure that "our banking system was privatised to serve the interests of multinationals". The step was only a prelude to the total sell-out of public sector banks too, he said.

In the name of one time settlement, compromise and interest waiving, the defaulted loans were being written off. Also, under the label of corporate debt restructuring, huge amounts of bad loans were being converted into equity of the borrowers. Such a measure meant conversion of bank loans into investment in the equity capital of the defaulting companies, he said.

Mr. Venkatachalam said all unions of employees and officers in the public and private sector banks, cooperative banks, rural banks and foreign banks will participate in the proposed all-India general strike on February 24.

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