Wednesday, December 12, 2012

Prepare for strike action at short notice-Govt. in a hurry to push through the Banking Reform Bills....


AIBEA CIRCULAR NO. 26/159/2012/46 dated: 11th December, 2012 :

Dear Comrades,

Govt. in a hurry to push through the Banking Reform Bills
Get ready for actions to register your protest
Prepare for strike action at short notice

All our units and members are aware that we have been consistently fighting against the agenda of the Government to foist banking reforms aimed to boost private banking and dilute public sector banking. The various steps being taken by the Government are all with this objective. 

Banking Laws Amendment Bill :  As a part of these reforms, units are aware that right from March, 2011, the Government is trying to get the Banking Laws Amendment Bill, 2011 passed by the Parliament. This Bill covers amendments to Banking Regulations Act and Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970/1980.  The proposal is to enable merger of Banks easier, allow more voting rights to shareholders both in private banks and in public sector banks to step up their influence, to allow Banks to engage in Forward Contract transactions, etc.

In the original Bill, the Government wanted to allow 100% voting rights in private Banks to enable them to be taken over by Corporates and FDIs.  Due to our repeated strike actions and the efforts of leaders like Com. Gurudas Dasgupta in the Standing Committee, that the Government has now proposed to amend it from 10 to 26% instead of 100% voting rights.   

One more Bill: In addition, another Bill ( Enforcement of Security Interest and Recovery of Debts Laws Amendment Bill 2011) was introduced to amend the Sarfaesi Act, Debt Recovery Act. This Bill was to enable the Banks to convert their Bad Loans/NPAs into share capital of the borrower company.  Instead of stringent measures to recover the bad loans, the idea is to favour the defaulting company by waiving their loans and treating the loan amount as investment in the equity capital of the defaulter company.   This Bill came up for discussion in the Lok Sabha on 10th December, 2012.  Various MPs spoke and raised their objection.   

Lashing speech by Com. Gurudas Dasgupta:  Speaking against the Bill, Com. Guruduas Dasgupta asked why the bad loans in the Banks are increasing alarmingly, why there cannot be a special court and expeditious trial of all the willful defaulters who have stolen people’s money and cheated the country, why should the criminality of the corporate defaulters be condoned, why the list of bank loans defaulters not be published, etc.

Walk out by MPs :  But the Government was adamant to get this Bill passed.  Hence, the entire MPs belong to NDA led by BJP, the CPI, CPI-M and the entire Left, the TMC, AIADMK, etc. staged a walk out.  But shamefully, instead of referring the Bill to the Standing Committee, the Government got the Bill passed with the remaining MPs. Thus the flood gate has been opened to convert bad loans into the capital of the very same borrower. 

The Government, in the same way, wanted to push through the Banking Laws Amendment Bill also.  But Shri. Yeshwant Sinha (BJP) and others raised vehement protests and that the Government is even violating the procedure by presenting the Bill with new amendments which were not referred to the Standing Committee.  The bill thus could not be taken up for discussion yesterday.  Today also, the government again listed the Bill for passage but the Bill could  not come for passage.

Amendments moved:  In the meantime, Com. Gurudas Dasgupa CPI, Prof. Sk Saidul Haque, CPI-M, Com. Prabodh Panda, CPI, Com. Ramachandra Dome, CPI-M and Com. Khagen Das, CPI-M have moved the following amendments to the proposals of the Government.

a)    To delete the proposed Clause 3A in BR Act on Forward Contract business by Banks.
b)   To delete the clause on increasing the voting rights from 1 to 10% in PSBs
c)    To allow voting rights in private Banks only upto 10.1% instead of 26%.
d)   To not to apply the new Section 2A on exemption from Competition Commission for merger of Banks in PSBs.
e)    To not allow reduction in Government’s equity in Banks even if the Paid up Capital is increased.

Units are aware that these are the demands of AIBEA also.  We are thankful to these MPs who have raised our viewpoints and moved these amendments.

But the Governments appears to be belligerent and somehow wants to bulldoze and get the Bill passed. 

Merger moves:  Units may also be aware that recently the Government has sent some unilateral guidelines to the Banks grouping them into few Groups in the name of working out uniformity, etc.  But the hidden agenda is to work out possible mergers.  The open speech of  Finance Minister in the recent Bankers conference of IBA that Bank mergers should take place has added weightage to these moves.

GET READY FOR STRIKE :  Hence, comrades, we must get ready for protest action.  We are planning for strike action at short notice if the Government still goes ahead with the Bill.  We are in touch with other unions.  Be ready and await our call.

 With greetings
 Yours Comradely,