July 15, 2020
Financial Accountability Network India along with other civil society organisations, trade unions, bankers, people’s movements and networks strongly demand that the time for the consultation on the discussion paper on governance be increased to a minimum of three months along with necessary arrangements for wider participation of people from across the country (virtually or otherwise). The paper being in English highly limits the participation of a vast majority of people, hence we also demand that the paper be translated to regional languages and circulated widely.
On 11th June, RBI came out with the discussion paper “Governance in Commercial Banks in India” opening it for public comments. The last date given by RBI is 15th July 2020, just over a month from the date of publication of the paper. If this paper actually aims to have a wider consultation with all its stakeholders as it claims, this time frame is highly inadequate. It is unfortunate that RBI too seems to follow, a now established pattern of trying to rush through and pass important policy changes, without proper consultation. At a time when physical meetings are not possible and when a large population is either not technologically literate or unable to access, it becomes obligatory for the administration to ensure maximum participation. Requesting to send in emails at a short time, does not show intent for wider consultation.
There is a very immediate need for regulations and checks in governance of the banks. The banking sector has been facing a deep crisis, this has costed people their savings in multiple ways. Be it in the case of cooperative banks or commercial banks, people have been looted of the savings due to cases of frauds or through arbitrary bank charges and penalties. Through such measures the banks are trying to recover losses made by big corporates, many of them wilful defaulters. But neither the government nor RBI have taken any step towards changing their lending policies, instead multiple policies and administrative changes, have been proposed and implemented without much effect. On the contrary we have seen the number of cases of fraud and cronyism increasing.
Despite being the primary financiers of commercial banks, depositors hardly have any mechanisms to hold the banks accountable for their faulty investments. In order to meaningfully engage with all stake holders and to develop a comprehensive policy of governance, the date for comments needs to be extended by three months. This has to be followed up with arrangements for virtual hearings. For a governance policy, the RBI needs to go beyond just financial accountability. Unless there are conversations and discussions on social and environmental safeguard policies, transparency and accountability to the depositors, criminalisation of wilful defaulters, changes in the lending policy, reviving development banks for large scale lending etc., these recommendations for changes in governance in going to be piece meal and ineffective.
We demand RBI extend time for consultations to three months and this time ensure wider possible consultations. The easy way is to push for policy changes with hardly any consultation, but that has not been effective in tackling the problem, in fact it has only made the situation far worse for the common people. Further, this now seems to be the new normal to try and use the pandemic to push in every regressive policy like the EIA and Electricity amendment act, revision to wage code, labour laws etc.
- Prof. CP Chandrasekhar, Economic Research Foundation
- D Thomas Franco, Save Public Sector
- Devidas Tuljapurkar, General Secretary, Maharashtra State Bank Employees Federation
- M G Devasahayam, Retd IAS
- T R Bhatt, Former Banker and Writer
- Ashok Chowdary, All India Union of Forest Working People
- Sanjeev Chandorkar, TISS Mumbai
- Sanjay MG, National Alliance of People’s Movements
- Gautam Mody, General Secretary, New Trade Union Initiative (NTUI)
- Kripakaran G, General Secretary, State Bank’s Staff Union (Chennai Circle) and General Secretary, NCBE Tamilnadu State Federation
- A Raghavan, General Secretary, State Banks’ Staff Union (Kerala Circle), Thiruvananthapuram
- Raja Kurup K, Vice-President, SBI Pensioners Association Kerala and Former General Secretary, National Confederation of Bank Employees (Kerala) and Former General Secretary, State Banks’ Staff Union (Kerala)
- Raghavan, General Secretary, State Bank Staff Union, Kerala
- Leo Saldanha, Environment Support Group
- Vijayan MJ, PIPFPD
- Anil T Varghese, Delhi Solidarity Group
- V Sridhar, Journalist, Bangalore
- K Ashok Rao, All India Power Engineers Federation (AIPEF)
- Sanjeev Danda, Dalit Adivasi Shakti Adhikar Manch
- Dr M C Rajan Advocate, Madras High Court
- Saswati, Environics Trust
- Ashwathy Senan, The Research Collective
- Benston, St. Stephens College Delhi
- Edwin, Director, Open Space
- Nishant, People’s Resource Centre
- Senthil Babu, French Institute
- Dr Bharat Patel, Machimar Adhikar Sangarsh Samiti
- C P Krishnan Joint Secretary, Bank Employees Federation of India
- Financial Accountability Network India (FAN India)
- Centre for Financial Accountability
- Working Group on International Financial Institutes (WGonIFIs)
For more information, please contact: