AIBEA seeks policy correction in banking industry

AIBEA seeks policy correction in banking industry
PTI
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First Published: Thu, Aug 09 2007. 11 38 PM IST
Updated: Thu, Aug 09 2007. 11 38 PM IST
Coimbatore: Alleging that services and interest rates were more favoured for class banking than mass banking customers, All India Bank Employees Association (AIBEA) today sought policy correction to reverse the trend and help agriculture and education sector grow.
Though the banking industry has been transformed from class banking to mass banking reaching the common people under public sector, it was observed that the policies now seemed to be changing in favour of corporates, AIBEA General Secretary, C H Venkatachalam, told reporters here.
It was found that banks were encouraging ‘high cost bulk deposits´ from corporate and industrial houses by paying them interest upto 12 or 13%, while the interest for common people’s savings account was only 3.5% and on fixed deposits around 6 to 8 %, he said.
Instead of extending 18% of bank credit to farming sector, an average credit to it was only 13%. Moreover, credit to cultivator households by commercial banks has come down from 35% in 1991 to 26% in 2005, while credit from private money lenders has gone up from 17% to 27% during the period. Even the loans being provided to students were not to satisfactory levels, he said.
AIBEA and All India Bank Officers Association have launched a national campaign to collect one crore signatures and submit them to the Prime Minister on 31 Aug.
The associations would give time to the Centre till the winter session of Parliament to look into the matter and if it failed, the banks would resort to strike till the goal was achieved.
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First Published: Thu, Aug 09 2007. 11 38 PM IST