 Hello and welcome to NewsClick. Today we have here with us Mr. C.H. Venkatachalam, the General Secretary of All India Bank Employees Association, A.I.B. Welcome to NewsClick, Mr. Venkatachalam. Yeah, how are you? I am good sir. Today we have read in the news that government has announced more than two lakh crores of capitalization to the Indian banking sector, probably public sector banks. So, as a bank employee and a leader of bank employee employees union, what do you think is going to be the impact on the banking sector? This is that way a welcome measure because we have been demanding. See, the point is that banking sector, public sector banks are totally connected to economy and its development. So, if our economy has to develop and grow and progress, naturally there is a link between the development in the economy and the progress of the banks. But banks, there is a crisis now in the sense that number one, banks are not able to lend more because there is a problem of capital. And why there is a problem of capital? Because banks are earning profit but everything is going diverted towards bad loans provision. So, there is no capital and their capital adequacy ratio is coming down. So, they are not able to lend. So, that's why we have been fighting two things. Number one, the government should take effective measures to recover the bad loans so that the banks are not required to provide more and their capital adequacy ratio is not adversely affected or the government should keep capital so that the banks can do business. So, that way, I think one portion, we know the nexus between the government and the people who have taken the bad loan is not that easy for them to recover rather they pamper them, they give all concession for right of. So, at least this and now they are coming forward. Let's hope faithfully, sincerely they will give this capital and banks will be able to use this money for productive purpose, for agriculture development, for small scale industries, employment generation, education, infrastructure like that. Again, this money is also, government has been telling, 2013 it has been given to some people by the previous government. So, if the government also will give loan to all types of people, same will be in square one. We hope it doesn't happen, but to that extent it's a welcome measure. Is the amount declared enough to capitalise the banks, adequately capitalise the banks? It is not enough at all. We need more than four lakh crores, 50% of that, that two in two years they are telling. But in the meantime, there is no hope or possibility that bad loans, the NPS will be contained. If again bad loans will be increasing, again whatever capital they give, they will be getting eroded because of more and more provisions. So, this is only one step. This loan is not going to help unless it is also simultaneously corresponding to that followed by recovery. That is where the real weakness in the banks are now. The banks are not able to recover because the economy is not doing well, somebody deliberately shitting. So, that also government has to keep in mind. This is okay, but this loan is not going to solve the problem. We may be again in the same deep trouble after one year or so when whatever has been given will be siphoned out because of more provisions. So, this loan is not enough. Real problem is recovery of bad loans. Talking about the economic recovery, government linked this recapitalisation of the banks with economic recovery, especially of special lending to MSME micro and small enterprises. How is it going to help because in any way there are norms for priority sector lending. Is this new lending going to be additional to the existing priority sector lending? There is nothing new that can be anticipated. The economic development pattern, we know that earlier also and now also, the same pattern will continue. It will benefit only the rich people. With all that MSME, whatever they say, ultimately only some section of the top rich affluent who can afford credit, they will be benefited. Incidentally, some it may go to the real needy people. For example, agriculture, we need more money. Hardly 30% of the needs are given by the banks. Even in Tamil Nadu right now there is a big problem in southern district. Some children have committed suicide by burning themselves because they are not able to repay the loan or interest. So, when that is so, unless these loans are given with a particular project in mind or purpose in mind. Again, it is like a corporation water tab. It will get leaked out. It will go to somebody. Purpose will not be solved. Their intention is to revive the economy. But we know how the corporate people, how they are manipulating. They are not taking loan. They say, you give us further concessions. Then only we will take loan. That means the cost of lending will come down and to match it, they will reduce the cost of funds. That means ordinary people who are saving the money, they will not get the return. So, the burden will be on the poor people again, ordinary people. So, it's a vicious circle. Basically, government must follow a pro-people economic policy. They are talking of only reviving the GDP numbers. Simply, GDP increase doesn't mean people are economically better off. Because the bulk of the portion of the GDP benefit is high fund out to the big people's benefit. So, it's not going to solve. They will show numbers of development. GDP is going from 5.7 to 6.7 like that. But if people will continue to suffer, let's hope that they change their policy and do something good for the people. Let's hope. As you said, banks need about 4 lakh crores of recapitalization. But government so far has announced only little more than 2 lakh crores. So, is there any particular reason behind it that government wants to shut down some of the smaller banks or do the merger of bigger banks? Is there something like that? Yeah, quite obviously. Quite, you are right. Quite obviously. That's also an agenda that they will strengthen big banks, close down to small banks, merger. And that is the thing now. We want big banks, big banks, competitive banks. Big banks by themselves do not mean that they are good banks. We need good banks, those banks which will help the common people. What is the purpose of big banks? That means, the risk is more. We have seen in America, elsewhere, very big banks, they have collapsed. So, India cannot afford to take the risk at this moment when already we are in crisis. So, I think the government is trying to take a big risk in making the bank bigger. We need good banks. We need effective banks which can help the people. In the sense, the real economic revival, agriculture must be remunerative. Job generation is very important. Urban living should be better. Retail consumption should be matched with production. Industrial development is also equally important. But they are going round the boatway. So, I don't think this is going to help us. Rather, this is going to be risky. Big banks mean definitely risky. Mergers is not warranted at all. We need expansion. Expand the banks. Open more and more branches. Give more loan. Our GDP ratio is hardly 47-48%. Yesterday, I saw somewhere a report. In other countries, it is 100-110%. China, they say, 147%. So, under the banks, we will give loan for production. How there will be production? And then it will go to the people. Prices will stabilize. So, now these loans are all helping only speculation, not stability. Thank you for giving us your time. Thank you, Srijana. Thank you. Thank you for watching NewsClick. Keep watching us on NewsClick.in.