The All India Bank Officers' Confederation has called for tightening the norms for emigration/foreign travel of bank defaulters following the Rs 11,400 crore Punjab National Bank scam.
Asks the Centre to remove regulators and bureaucrats from Bank Boards
The All India Bank Officers' Confederation has called for tightening the norms for emigration/foreign travel of bank defaulters following the Rs 11,400 crore Punjab National Bank scam.
In a statement on Friday, the officers’ trade union proposed several measures to deal with the problem of bad loans. First, the union said, banks should write to the home ministry and ensure passports of defaulters are stamped “emigration clearance required”, so that they do not flee the country.
The trade union demanded a relook at the NPA norms in terms of reasons, scope and recovery instead of just declaring an account with a default of 30 days as a non performing asset (bad loan).
Further, the union asked for removal of Reserve Bank of India (RBI) and finance ministry officials from bank boards as they were supervisors and, hence, could not supervise themselves. The union instead sought for the appointment of candidates who could play the role of a watchdog on bank boards instead.
Finally, the union also questioned RBI's decision to introduce Letter of Undertaking, a concept not in vogue among foreign banks (the PNB scam happened due to misuse of the Letter of Undertaking), besides urging the regulator to publish the list of defaulters.