Bank unions oppose RBI’s decision to allow compromise settlement for wilful defaulters
Two banking associations, AIBOC and AIBEA, opposed the Reserve Bank’s move to allow lenders to settle non-performing loans under a settlement arrangement.
RBI’s recent framework for settlement settlements and technical write-offs In a joint statement, the unions said it was a harmful step that could jeopardize the integrity of the banking system and undermine efforts to effectively combat defaulters.
“As major stakeholders in the banking industry, we have always advocated for stringent measures to tackle the problem of willfully defaulted defaulters,” the Association of All India Bank Officials (AIBOC) and the Association of Bank Employees of India (AIBEA) said in a statement. .
She said that allowing accounts classified as fraud or willful defaulters to be settled is an affront to the principles of justice and accountability, adding that it not only rewards unscrupulous borrowers, but also sends a sad message to honest borrowers who strive to meet their financial obligations. .
Now, this sudden change in the framework before RBI She added that granting compromise settlements to defaulters comes as a shock, and will not only erode public confidence in the banking sector, but also undermine depositors’ confidence.
She said this fosters an environment in which individuals and entities who have the means to pay their debts choose to evade their responsibilities without facing appropriate consequences.
She added that such leniency entrenches a culture of non-compliance and ethical risks, leaving banks and their employees to bear the brunt of losses, adding that it is worth noting that defaulters have a great impact on the financial stability of banks and companies. total economy.
She added that by allowing them to settle their loans under the settlement, the RBI is essentially condoning their wrongful deeds and placing the burden of their misdeeds on the shoulders of ordinary citizens and hardworking bank employees.
The unions called on the RBI to review and withdraw the decision, and the central bank should prioritize protecting the interests of honest borrowers and depositors who depend on the integrity of the banking system.