'Tighten Securitisation Act to cut NPAs'

It is a move which loan defaulters fear the most and which is being pushed aggressively by All India Bank Employees' Association (AIBEA). The federation is urging for more teeth to the Securities Act and has called for overhauling of banking laws, making recovery of loans easier.

In a statement, Karnataka Pradesh Bank Employees Federation (KPBEF) said AIBEA has suggested the measure which includes attaching personal properties of defaulters and debarring these defaulters from holding any public office or contesting elections.

Said H V Rai, general secretary, KPBEF: "The bad loans in the banking industry euphemistically called non-performing assets, are causing serious concern in the banking circles and to the people of India. The bad loans are increasing year-after-year and is estimated to be about Rs 96,000 crore. No serious steps are being taken to recover the bad loans."

He added that on the other hand, huge amounts are being written off from the profits of the banks.

"During the last 10 years, nearly Rs 75,000 crore has been written off as bad loans. Last year in the 27 public sector banks alone, of the profit of Rs 39,458 crore, Rs 14,353 crore (36 per cent of profits) was provided towards the bad loans. This is an issue, which has assumed national proportions," said Rai.

He added that of the total NPAs, about Rs 45,000 crore is due from the big borrowers and large corporate house and they belong basically to the private sector.

"They have the capacity to repay but are not. It is a fact that the amount locked up as NPAs, if recovered, the public sector banks in India will not suffer from any shortage of capital and will be healthier than any bank anywhere," he added.

Rai further said, the banking sector has got public money as deposits to the tune of about Rs 18 lakh crore and "we believe this money should be used for people's welfare and not for private corporate loot."