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A top banking association has demanded amendments in relevant laws to speed up recovery of bad loans amounting to Rs 1,64,000 crore.
All India Bank Employees Association (AIBEA) has described increasing bad loans of public sector banks as a "serious menace" and asked the government to make necessary changes in recovery laws to deal with the issue.
"Increasing bad loans of banks is a serious menace. These loans are eating into the very vitals of our banks," C H Venkatchalam, Secretary General of AIBEA, said in a statement here today. AIBEA represents more than 7 lakh employees.
Quoting an RBI report, he said the amount of write offs towards bad loans was also on the rise.
According to RBI, bad loans worth Rs 1,41,295 crore were written off between 2007 and 2013. And most of these write offs were in favour of big defaulters and corporate borrowers, Venkatchalam said.
He described bad loans as "a systematic loot of public money" and said big borrowers are the real culprits.
"For some time, it was sought to be explained that increase in bad loans was due to priority sector lending and agriculture loans.
"Later, it was labelled as system generated NPAs. But now it is becoming clear that it is a systematic loot of public money. Even the Government has confessed that big and rich borrowers are the real culprits," Venkatchalam said.
Reeling out figures, the AIBEA leader said public sector banks are saddled with Rs 1,64,000 crore of bad loans. Bad loans in 30 top accounts in banks stood at 64,000 crore, while 172 corporate accounts have Rs 37,000 crore worth of these loans, he said.
"Make wilful default of bank loans a criminal offence and publish the list of those defaulting on loans of Rs 1 crore and above," Venkatchalam demanded.
In order to highlight the loan recovery issue and demand remedial measures, AIBEA has decided to organise various forms of protests on December 5, he said.
