‘Banking Act changes to help corporates’

Coming down strongly against the Banking Regulations Amendment Bill 2011, Maharashtra CPM secretariat member Ajit Abhyankar said the amendments were made to help the local and the foreign corporates.


“Instead of corporate banking, the thrust ought to be on promoting the rural retail banking to help the rural populace. The increase in number of foreign banks will not cater to this requirement,” opined Abhyankar.


He was speaking at a seminar organised by the Bank Employees Federation of India (BEFI)- Kerala here on Saturday.  Foreign banks can have an overall investment limit of 74 per cent of the paid up capital of the private sector banks. “But their voting right is limited to only 10 per cent and the amendment seeks to increase it to 26 per cent. The share capital of the scheduled commercial private sector banks in India is ` 4,805 crore. But these banks are managing total deposits worth Rs 10,02,759 crore. If the bill is passed, the situation would be dangerous,” said  Abhyankar.


He said the corporates were waiting eagerly for the Banking Regulations Amendment Bill to be passed. “Even without the banking licence, the corporates are exploiting the natural resources. But if they are given the licence, they would have the decision-making authority over large chunks of money and the hazard is unimaginable,” he said.


According to him, the world is on the top of a volcano of speculative finance. “If more foreign banks are allowed in our country, the policy focus would be on the speculation over certain financial products than the basic banking products, which is not good for our economy,” Abhyankar said. M B Rajesh MP and V K Prasad, former secretary of the All India Bank Officers’ Confederation,  also spoke.