'For a responsible person like him to utter such nonsense is shameful.'
'He is not fit to be a director on the RBI central board.'
When Swaminathan Gurumurthy, a director on the Reserve Bank of India's central board, rose to speak at the 52nd anniversary of the Tamil magazine Thuglak, he used a Tamil word 'kazhisadai' (roughly translated as filth) to describe employees of public sector banks. Finance Minister Nirmala Sitharaman was on the dais when Gurumurthy made his remark.
This has provoked vociferous demands from various PSU bank unions and the RBI employees' union that Gurumurthy apologise and also be removed from the RBI board.
"I know how good PSU banks are and how the balance sheets of more than 12 (PSU) banks (that have come out with their quarterly results) are improving. Gurumurthy is turning a blind eye to this improving situation and instead employing indecent words to insult PSU bank employees," Vishwas Utagi, former vice president, All India Banking Employees Association, tells Prasanna D Zore/Rediff.com.
You, along with others from various banking organisations, have demanded an apology from S Gurumurthy over his remark against bank employees.
We have asked for an apology from him and want the RBI to sack him because in the finance minister's presence he uttered that word disparaging public sector employees and their hard work.
Gurumurthy is insulting PSU banks' employees deliberately. I know him from his days when he was part of the Swadeshi Jaagran Manch. For a responsible person like him to utter such nonsense is shameful. He is not fit to be a director on the RBI central board.
As a former AIBEA executive I know how good PSU banks are and how the balance sheets of more than 12 (PSU) banks (that have come out with their quarterly results) are improving.
Gurumurthy is turning a blind eye to this improving situation and instead employing indecent words to insult PSU bank employees. His knowledge about the PSU banking sector is half-baked.
What good do such apologies serve when the present government is determined to go ahead with the privatisation of PSU banks?
That is this government's policy. People (borrowers of loans from banks) will default, but then despite lot of tensions in the last five to eight years, (PSU) banks are improving their operating profits and margins.
The net profit of these banks is affected only because we don't have sterner laws to deal with willful defaulters (of banking loans from PSUs).
It is a fact now that Gurumurthy's philosophy about swadeshi has changed along with that of this government. But Gurumurthy is not that significant. We are seeking his apology because the word he used for PSU bank employees must be condemned unequivocally.
He should apologise and if he refuses to do that, then he should be sacked immediately.
He was opposing privatisation when Manmohan Singh was prime minister. What he used to speak from the Swadeshi Jaagran Manch's platform is different from what he is speaking now.
People like Gurumurthy always change their colours and speak in their master's voice. Today their master is the Bharatiya Janata Party.
Don't you think privatisation of PSU baNks will bring about efficiency and better capital utilisation in the banking sector and immensely benefit economic growth?
Certainly not!
How much do those who compare PSU banks with their private counterparts know about private banks? The rot runs deeper among private sector banks. Their balance sheets are not transparent. They (private banks) also have a huge share of willful defaulters.
What is the state of such loans in Yes Bank or Kotak (Mahindra) Bank or ICICI Bank of HDFC Bank? The RBI keeps on fining all these banks repeatedly (for not disclosing such information).
One fails to understand why the Government of India wants to disown public sector banks and is not paying attention to their better performance.
Do you know that today SBI officers are paid better than ICICI Bank (or other private sector bank) officers? I can challenge anybody to prove me wrong on this.
Most employees of private sector banks are hired on contract and their salaries are very average.
What is the reason why PSU banks are balance sheets are in the red year after year?
That's because of willful defaulters who have government patronage. The government has not come up with appropriate laws.
Banks are not allowed to use provisions of the DRT (Debt Recovery Tribunal) under the SARFAESI Act (Securitisation and Reconstruction for Enforcement of Security Interest Act (SARFAESI), 2002).
The role and powers given to the NCLT (National Company Law Tribunal) related to debt recovery under the new laws like IBC (Insolvency and Bankruptcy Code, 2016) are humbug.
Using the provisions of these laws the banks could recover only Rs 4 lakh crore out of the NPAs (non-performing assets) of Rs 11 lakh crore.
The government is not bringing in stricter laws or provisions of debt recovery because they want to give a smooth and profitable exit path to the willful defaulters as they fund elections.
The situation was no different when P Chidambaram was the finance minister. But this government is notoriously and openly doing the same.
Today, out of the loans of 100 willful defaulters, loans of 50 of them are happily being written off.
These are the ills of the system and people like Gurumurthy have the guts to use rubbish words against PSU bank employees.
Are you saying there is no scrutiny of the balance sheets of private or public sector banks by the banking regulator?
I don't agree with those who say that private sector banks offer better services and are more transparent and efficient than public sector banks. I will give you 101 examples to prove the opposite.
Don't forget that all those (people) who developed and under whose watch these private banks flourished came from the public sector banks. Once you develop such models and let it prosper, then there is lot of handshakes (compromises).
There are private sector banks which since their inception have been writing off loans of willful defaulters within six months. Who is scrutinising these private sector balance sheets?
The RBI's autonomy has been under danger since demonetisation. The RBI is not serious about it (performing the role of a banking regulator). The most they are doing is fining these banks repeatedly. Almost all the corporate and private sector banks have been fined repeatedly.
Are fines a deterrent strong enough to stop their ill practices? Why haven't the RBI cancelled licenses of repeated offenders of banking regulation laws? But they have saved banks like Yes Bank saying it is too big to fall. Yes Bank was saved to save the non-banking finance sector.
What is the way ahead then?
The RBI will have to review both public and private sector banks' balance sheets independent of the influence of the Government of India.
The RBI is a competent institution with a talented bunch of people. But then this institution is bowing to the diktats of the government. They are doing what the government is asking them to do.
