 Hello and welcome to NewsClick. Banking sector has been in news quite a lot recently as we sent as yesterday with the release of RBI's annual report. So finally after 8 months of demonetization, RBI's annual report has come out with the amount of all demonetized currency that has come back to the bank. And there are other issues as well regarding the banking sector. There is this whole debate about privatization of the public sector banks that has been going on. There are also the issues of NPA that have been festering almost for the past two years. So to talk about all these issues we have with us Mr. Thomas Franco, the General Secretary of all India Bank Officers Confederation. Welcome to NewsClick Mr. Franco. Thank you. As you know the report says that 99% of all the demonetized currency has come back into the system after 8 months. What do you think of the how it has affected the economy? How it has affected the banking sector itself? It is really a crime against the economy of the country I feel. On November 8th when this announcement was made by the Prime Minister, the objectives of demonetization were spelt out as four. One, abolition of black money. Two, abolishing corruption. Three, abolishing counterfeit notes. And four, an end to terrorism. So we have to evaluate on that ground. Later on they shifted the gold post and they said it is digitalization. That we will come to later. But these four issues if we see 99% of the notes have come back. Still people are holding currency. Ordinary people. It is not black money. A lot of women from self-help group keep coming to the banks saying that we did not know or we kept some money hiding so that nobody takes it away under the rice in a pot and all. Now we have found this money, please exchange. We are not in a position to. In spite of Supreme Court giving a ruling that give one more option for a short period to exchange currency notes which are for genuine reasons people could not exchange. Mr. Bang of India is opposing that so nothing could be done. So if we count those notes which are already available with the flick, exactly we do not know what is the number. Then there is currency deposited by NRIs as well as Indians who were abroad during that period of time. They were given time to deposit in the Reserve Bank of India even after 31st December. Reserve Bank has collected the money but they have not exchanged it. They had said that they will be crediting to their account. The credit has not come. Now they say that it is likely to be credited by September 30th. That also we do not know what is the figure. So it leads to a question how we got back more than what the Reserve Bank said that is in circulation. And where is this black money? The attorney general of the country. He when he was arguing in the Supreme Court had mentioned that 4 to 5 trillion that is 4 lakh to 5 lakh crores of money will not come back. What he makes a statement should be the official statement. Now where is it? Either people found ways to exchange the black currency what they were holding and we have seen also in the crowds. How many rich people were standing in the queues? Where was Amvani Adani? Did they not have some currency available in their companies? Did they come to the streets or stand in queue? It did not happen. Now everything has been ruled wrong. One black money has not come back. The finance minister makes statement that that was not the purpose. He says that it was not to ensure that the money does not come back. Now we have got more people who are filing returns and we are investigating. What they are investigating? How long they will investigate? We do not know. I have a big question to the government. During the period of demonetization when you had the condition that an individual cannot exchange more than 24,000 rupees crores of monies have been caught in fresh currency denominations. Where did it come from? How did it reach their hands? And what is the investigation done in this 10 months, November 8 to 9? What they have done? Let them disclose it to the people of the country. You made every town they can hurry to stand in the queue. There has been a death of 13 bankers. There has been a death of more than 100 ordinary human beings. Don't you have any accountability for those deaths? These are questions the government has to answer and the RBI has to answer more. After all it is the RBI which supposedly gave the recommendation for demonetization. Just a few hours before the prime minister made the announcement in public. On what basis they did this assessment? And where are the figures now? Why there was so much of delay in compiling the figures? They say that we had been counting. Counting was done at the counters of the banks. And banks they reported on a daily basis they were counting. After 23rd December whatever was the figure was declared by Reserve Bank of India on 24th itself. After that they started hiding the figures. Why? We from the All India Bank offices confederation had been demanding that from day one you please disclose the details. How much was printed? What denomination? Where it went? Which bank it went? On a daily basis you give the data. Wherever money was caught it is possible to immediately find out whether it went from the bank and if so from which bank which branch. Then immediately you can take action on those banks. I had been making statements that you are giving more currency to the private sector banks. And in the private sector banks only this misappropriation is taking place or we never replied to the inquiry. Today I feel that it is more correct to demand resignation of the Reserve Bank of India government. Not only on demonetization. Today RVA is totally supporting the private sector. After all RVA governor also came from he had been working with the international financial institutions. He had been working with Reliance and his own deputy governor is making statement that we do not require so many public sector banks and time has come for re privatization. Are these people really patriotic? Public sector institutions, public sector banks are patriotic institutions which have done so much for the development of this country. Reserve banks own profit went down by 35000 crores mainly because of this demonetization and banks have been affected very badly and banks are putting the burden on the ordinary customers. The chairman of State Bank of India was demanding that you should give us the cost of demonetization. Finance ministry till now has not replied to that. So what the banks are doing now? They are increasing the service charge on the customers who are ordinary customers. It is not high value customers who are being charged. It is the ordinary savers who are being charged more and they are being affected and quite a number of them are closing the accounts and going. On the one hand you were saying that you open more account bring in financial inclusion and we open 30 crore account and the same accounts are getting closed now because they are not able to maintain the minimum balance. That is one kind of a loss. Then the banks had also quite a lot of expenditure by recalibrating all the ATMs. Now they have brought in 200 rupee note. That is again in a different size. So again the ATMs have to be recalibrated. Everything costs for the bank and till date most of the banks have not paid compensation for working late and working on holidays. Then coming to the three other issues counterfeit currency. Now they say that overall what they got is just 43 crores and already people have started printing 2500 notes. So that objective is also gone. Terrorism has it reduced anywhere. It is only increasing. See root cause of terrorism is not attacked and this kind of cosmetic measures are not going to help. And corruption every citizen of the country you can talk to. Where have you found corruption coming down? It is prevalent as it existed that day before November 8th. So ultimately the effort for curbing black money has not been achieved and whatever was told as objective has totally failed. So government has to own responsibility. Reserve bank has to own responsibility. Now that last objective they brought in in between digital economy. This digital economy or the cashless economy it is not going to help the larger majority in this country. See when ATM's were introduced people found it convenient and automatically they started using it. But now you are forcing people to switch over to this economy. This digital economy is welcome as far as people take it voluntarily. Demonitization as a whole has terribly failed you own explanation. The Reserve bank has said that all the cases of at least some cases of non-performing assets will go to the national company not tribunal the NCLT. So what is the progress in it? How far the recovery has taken place? Has it been beneficial for the banks? It is being projected in the media as if the bankers have done something bad. Bankers have followed the instructions of Reserve Bank of India from day one. It is Reserve Bank of India which brought in this classification of non-performing assets. That also they did not do on their own. We have documents to prove that it was as per the directive of the IMF and World Bank when we went in for a loan called the Structural Adjustment Program. We have released a book titled policies of the government are decided by IMF and World Bank and not by the parliament. In the case of non-performing assets at initial stage they said that it is the priority sector loans which are responsible for larger NPA. Now it is proved by RBI's report itself that 86.4% of the total non-performing asset belongs to the corporates and just few corporates who have taken loans more than 5 crores. And instead of trying to recover that money whatever efforts are being taken so far is only leading to a disaster. One example I will share with you. The first account which was referred to the National Company Law Tribunal. Today MIND has come out with the report. Here it says that out of 900 crores the amount realized is just 54 crores which amounts to just 6% of the outstanding. Now what happened to the securities? You are giving loans based on certain assets. What happens is that once a loan is referred to the company law tribunal or the IBC the liability is shared between different organizations. Bank has given the loan based on certain security but the security will be used not only by the bank but different people to whom the company owns. So the bank is getting only a particular percentage of what is available. Now if 6% is what you are going to get back in these corporate loans. In the first 12 accounts which was referred to NCLT by RBI the outstanding is 250,000 crores. Now they have added another 38 accounts including Vodafone which together accounts to 3,40,000 crores outstanding. Just 50 accounts. What is the percentage of NFPAs will that make? 3,40,000 crores is the NFPA. Total NFPA of 50 accounts. Now suppose if the same pattern continues. If the banks are going to get only 6% or 10% of the outstanding what happens to the public sector? From where they will have that money to adjust? Already Reserve Bank of India now has advised this bank that you create a provision of 50% in your balance sheet this year itself and next year you create another 50% that is 100%. From where money will come? This year itself if it is 50% of 3,40,000 crores. From where these banks will get this money? Then from where they will get the capital? What happens to the capital adequacy norms which you are talking about? Which is not a mandatory thing but because of IMF World Bank Agreement we have accepted that we will follow the Basel 3 norms. So the attempts which are being taken by Reserve Bank of India and the government is not to recover the money. This is going to help these corporate borrowers who will be declared as insolvent and after that there is no liability on them. So ultimate sufferer is the bank and the larger majority of this people, public sector banks are owned by the people. So people are going to suffer and that is going to have a very bad impact on the economy because once this banking sector comes to a stagnation, once this is the net result, banking sector will find it very difficult to lend and that is going to affect the economy as a whole. All over the world when there is a crisis in the economy, banks are encouraged to lend more but now you are leading to a situation where your lending is going to reduce. So what is needed is that what we have been demanding from the United Form of Bank Union as well as all India Bank Offices Confederation is that declare willful defaults as criminals, take over their assets, have criminal proceedings against them and in the case of other corporate borrowers, fix accountability. Who gave these loans? On what basis they gave? Implement the recommendations of the Parliamentary Standing Committee on Finance. So they have to immediately take steps to really recover the money instead of writing off these loans. Then only banking sector can be saved. So all the banking sector unions have called for a March to Parliament on September 15th. What are your demands? 22nd August we went on a strike. The first demand was against privatisation. Second was against merger. Then for appointing board of directors in the banking sector, then declaring these non-performing assets, declare willful defaults as criminals and take real steps to recover the loans. Do not shift the burden of non-performing assets on the common man of the country. Do not increase the taxation on the services of banking sector which was earlier 15 percent, now it is increased to 18 percent. The burden is on the common man. These are some of the demands. We have 17 demands in that and all the demands are related to saving the public sector character of banking sector. Now 22nd we went on a strike which was a massive success. But next day the cabinet takes a decision that they are going to create an alternate mechanism for merger of banks. Now merger of banks is not going to help the economy. India is still an underbanked country. On the one hand you are creating small banks, famous banks, saying that you have to go deep into the interiors, have more infrastructure for lending, more infrastructure for providing banking services. On the contrary you are trying to merge banks. And merger is nothing but a step towards privatization. This again you can see from the documents. The Narasimham Committee recommendation, Narasimham Committee 1, Narasimham Committee 2, then Raghuram Raha Jain Committee had made a recommendation called 100 small steps. And these small steps are taking place one by one. Ultimately aimed at privatizing the public sector banks. In the case of State Bank of India after the merger they increase the service charges, number of people are closing the account. Or they don't close because when you go for closing the account you have to pay some 153 rupees again as charge. So what people are doing is they are withdrawing, leaving small fraction of the amount. The rest of the amount they use the ATM card we draw and that is the end of the account. This is not good for a country. And in this issue of the agitation which we have called it as a moor char to the parliament on 15 September. All these nine organizations together are going to march to the parliament demanding the same thing which were the issues which were part of the strike issues. Stop attempts to privatize. Stop attempts to merge banks. See just few months before in March we signed an MOU with the finance ministry and the management in 11 banks that we will help the banks to turn around through a mechanism of changing the orientation of the credit pattern and all. That has not been even tried. And before that now already you start talking about merger. What is this? So there is no clear cut direction in this country. This government was making statement that minimum government, maximum governments. Except in one bank all the other public sector banks there is no board of director. Government was saying that we want to be more transparent. If you want to be more transparent then you should appoint people in the board so that there is questioning taking place. That is another issue which is part of this agitation. Then the major issue again there we are focusing on the non-performing asset. You are not taking actual efforts to recover the loans. So these are the issues which we want the government to look at. Have a relook at the policies which they are implementing in the banking sector. Provide autonomy to the boards of the banks and stop intervening in every stage. Today the finance minister of the country every month he is having a review of banks, chairman and managing director's performance. So he should also be accountable. Three years he is finance minister. So within this period if the NPA is keeping on increasing and the banking sector is further getting into the crisis they should also find the responsibility. Get out of the clutches of the IMF World Bank dictates. Banks have funds. My suggestion would be that let the government take loan from the banks. Repay the entire loan taken from the IMF and World Bank so that you end that conditions. Then you create a policy suited for this country. Looking at the large form sector and other sectors small industries, tiny industries which can create employment. We appeal to the people from different sectors of the economy. All the people who have been beneficiary of the public sector bank. Now they have to come and stand with us and safeguard the interest of the public sector bank. Let us hope for the sake of all the scrolls of people who are dependent on the public sector that I box demands and rest of the banking sector unions demands succeed. Thank you. 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