A public sector bank officers' union today demanded that senior bank officials should be vested with judicial powers on the lines of Income Tax Tribunals to deal with the problem of mounting bad loans.
RBI needs to support Public Sector Banks (PSBs) by insisting the government to legislate adequately and empower senior bank officials with judicial powers on the lines of Income Tax Tribunals, All India Bank Officers' Confederation (AIBOC) said in a representation to RBI.
There is also an urgent need to revive long-term lending institutions and restrict the activities of PSBs to commercial banking, mainly working capital and short and medium term loans, it said.
Functionaries of AIBOC met RBI Governor Raghuram Rajan in Mumbai today.
AIBOC apprised the Governor that the image of the bank, particularly that of PSBs has been largely hit by worsening balancesheet due to rising non-performing assets (NPAs).
"Government despite various pronouncements, on the contrary, has failed to provide for stringent laws on loan recovery including dealing with wilful defaulters," it said.
Besides, the union also expressed its reservations about merger and its implication on the banking sector.
Last month, SBI cleared a proposal for merger of subsidiary banks and Bharatiya Mahila Bank. It sought government's approval for the merger.
The country's largest lender has five associate banks -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.
Among these, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed.
