Stressing that private sector banks were failing one after another, the All India Bank Employees' Association (AIBEA) on Saturday said the Reserve Bank must be held accountable and the government should start taking all the private sector banks under its fold.
The umbrella body of bank unions said that lenders deal with public money and hard earned savings, and "If banks mishandle and mismanage..., criminal action should be taken against top officials of the bank who are responsible for the same, and severe punishments should be awarded."
They should not be let loose just like that, the AIBEA said in a statement.
"At the same time, in order to protect the interest of the depositors and bank's clients, Yes Bank should be immediately brought under the public sector. One by one private banks, which are being glorified by the government, are failing. It is high time that the government should take a call and repeat 1969 - all the private banks should be brought under public sector," said C H Venkatachalam, General Secretary, AIBEA.
The AIBEA said that people's money should be for people's welfare and not for private loot.
The Reserve Bank on Thursday superseded the board of the Yes Bank under former SBI executive Prashant Kumar and put a moratorium till April 3 during which customers are not allowed to withdraw more than Rs 50,000 from their account, even if a customer holds multiple accounts with the lender.
The RBI said the restrictions were imposed in the best interest of the customers due to ailing financial condition of Yes Bank which for the past some time has failed to raise enough capital to keep itself going.
It also brought to the fore the recent observations of the Economic Survey, presented in Parliament a month ago by the Chief Economic Advisor Krishnamurthy Subramanian, that one rupee invested in a public sector resulted in a loss of 23 paise while the same one rupee invested in a private bank will see a gain of 9.6 paise.
"This was meant to emphasise the government's belief that private sector banks are more efficient and profitable and public sector banks are useless and add to losses. Where is the efficiency of Yes Bank? Now comes the news that the RBI has clamped moratorium on Yes Bank in public interest and soon the bank would be restructured, the AIBEA stated.
"The fact that Yes Bank has been ailing with various problems including issues of divergence, non-disclosures, mounting bad loans, inadequate capital, inability to augment capital, etc.
"But the RBI took its own sweet time and after a lot of damage, it has announced the moratorium creating panic amongst the depositors."
The bank union said the RBI, being the regulator, cannot be unaware of the ongoings in Yes Bank.
"If today, the bank has to be closed down due to mismanagement, the RBI cannot extricate itself from the responsibility. Every time, the RBI is failing to take timely steps to prevent such bank debacles. Same thing was observed during United Western Bank and Global Trust Bank," Venketachalam said.
The AIBEA said there were repeated audit reports which pointed out glaring lapses and yet the RBI did no act. Same thing has happened now.
"The government must make RBI answerable and accountable. It is strange that the RBI is putting various banks under Prompt Corrective Action PCA restrictions. In fact, we feel that the government should bring the RBI under PCA norms," he added.