RBI Should Answer for Yes Bank Disaster: Bank Employees' Union Leader

• Central government should bring Reserve Bank of India (RBI) under Prompt Corrective Action (PCA), said top leader of All India Bank Employees' Association

Chennai: It is time that the Central government brings Reserve Bank of India (RBI) under Prompt Corrective Action (PCA) as it has been found wanting in taking timely action to prevent bank debacles, said a top leader of All India Bank Employees' Association (AIEBA).

He also said the government should make RBI answerable and accountable for the problems in Yes Bank.

"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 RBI took its own sweet time and after a lot of damage, it has announced the moratorium creating panic amongst the depositors," C.H. Venkatachalam, General Secretary, AIBEA said in a statement issued late Friday.

He said, RBI, being the Banking sector Regulator, cannot be unaware of the on goings in Yes Bank.A If today, the Bank has to be closed down due to mismanagement, RBI cannot extricate itself from the responsibility.

"Same thing was observed during United Western Bank and Global Trust Bank. There were repeated audit reports which pointed out glaring lapses and yet RBI did not act. Same thing has happened now," Venkatachalam said.

According to him, private banks which are bring glorified by the government are failing one after another.

"It is high time that the Government should take a call and repeat 1969 -- all the private Banks should be brought under public sector. People's Money for People's Welfare and not for private loot," he said.

As banks deal with public money, criminal action should be taken on the top officials if the banks mishandle or mismanage the money.

Venkatachalam said, hardly a month ago, in the Economic Survey presented to the Parliament by the Government on the eve of Budget, AKrishnamurthy Subramaniam, Chief Economic Advisor stated on behalf of the Government 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?" Venkatachalam questioned.

(Except for the headline, this story has not been edited by Scrabbl staff and is published from a syndicated feed.)