Mumbai, December 15:
Burgeoning bad debts in public sector banks has prompted an employees union to file a public interest litigation (PIL) seeking the Bombay High Court’s ‘interference and directions’ for effecting loan recoveries.
Subhash S Sawant, General Secretary, Central Bank Employees Union, has filed the PIL to get four of the eight respondents — Union of India, Finance Ministry, Reserve Bank of India and Central Vigilance Commission (respondents 1 to 4) — “to immediately and forthwith intervene”. The petition, which names Central Bank of India, All India Central Bank Employees’ Federation, Central Bank Employees Federation of India, and Indian Banks’ Association as the other respondents, seeks adjudication on a host of points of law of grave public importance.
Sawant has petitioned that the respondent authorities, to take legal action against various public sector banks so that they recover the loans that their clients have defaulted.
The PIL has also sought legal action against various public sector banks for not prosecuting and punishing their clients, who are highly influential and powerful persons/ entities, who have defaulted in repayment of their loans running into thousands of crores of rupees.
“…admittedly, if the prosecution and punishment was initiated and pursued, names of senior officials of the management of various public sector banks would be unearthed, making them vulnerable also for prosecution and punishment along with the defaulting clientele,” says the petition.
The petitioners – Sawant and Central Bank Employees Union – said a ruling be issued for a writ or an order in the nature of a writ directing respondents 1 to 4 to individually and/ or collectively take legal action against various public sector banks for their actions and inactions (vis-à-vis bad loans) within a fixed time schedule that the court may deem fit and proper. Pending hearing and final disposal of the present petition, the PIL has sought a directive to respondents 1 to 4 to file and affidavit and inform the legal action taken, if any, against various public sector banks, including respondent 5 (Central Bank of India).
Bad loans of public sector banks rose sharply to 5.33 per cent of total advances in September 2014 mainly due to sluggishness in the economy and other factors, including delay in environmental clearances. Bad loans of these banks stood at 4.72 per cent of total advances at the end of March 2014
PIL Sought To Allow Customers Unlimited Transactions on Own Bank ATMs
A Public Interest Litigation (PIL) was filed in the Delhi High Court seeking directions from the High Court to pass a resolution to allow the banking customers to use their ATMs for unlimited number of transactions without charging any fee on the customer. The PIL was filed by advocate Swati Aggrawal in the court seeking to quash the RBI direction to limit the number of transactions in ATM from one’s bank. This RBI direction came to the fore on August 14 this year. The PIL was filed by advocate Swati through advocate Vivek Kumar Tandon.
The Court said that the banks are unnecessarily taxing the account holders. The PIL had further said that the directive to this RBI order came into effect on November 1st, 2014 and is implemented by many of the banks, including the State Bank of India. There is also a limit for ATM users in six metro centers like Chennai, New Delhi, Mumbai, Kolkata, Hyderabad and Bengaluru to use ATMS of other banks for free for just three transactions a month, beyond which they have to pay Rs. 20/- per transaction.
The PIL has said that the direction from the RBI to charge ATM on own banks has come into force after a few banks and the Indian Banks Association called on the RBI to make changes in the free transactions at other bank ATMs. Advocate Tandon for the petitioner said that the RBI’s decision is against international practices that are prevalent across the world for use of own bank ATMs. There is no cap on the number of transactions that one can carry out on own bank ATM in the modern countries of the world and the transactions in own bank ATMs are free of charge despite the number of transactions.
The plea also said that the RBI’s current decision is in complete contrast to their earlier circular dated March 10, 2008 wherein the RBI as per the international practices of usage of ATMs had “justified and given directions allowing the free usage of ATMs for unlimited number of transactions on own bank ATMs”.
PIL seeks revamp of norms on legal professionals to help curb NPAs-Economic Times 15.01.2014
MUMBAI: Norms for the empanelment of legal professionals and company
secretaries by banks need to be revamped to help curb the growth of bad loans,
according to a review petition filed by a lawyer in the Bombay High Court.
The Reserve Bank of India (RBI) and the Indian Banks Association (IBA) must formulate guidelines and eligibility criteria for these professionals, Sanjay Lalit, a partner of
Mumbai-based law firm Jupiter Legal, said in the petition, also urging the court to reconsider its decision to reject his earlier application on the matter.
"If these guidelines are followed, the banks' NPAs can come down by at least 10%," Lalit told ET. The petition also sought a direction by the court for banks to upload the eligibility criteria on their websites. The appeal, which was filed in November, is yet to come up for hearing.
RBI Governor Raghuram Rajan has stressed the importance of restructuring some of the
bad loans to improve economic growth. The combined NPAs of public sector banks stand at about Rs 2.5 lakh crore, excluding restructured loans, according to data from the
central bank. Currently, there are no uniform guidelines for public sector banks that hire lawyers.
The empanelment of advocates should be on the basis of execution capabilities, experience, skills and competence, according to the petition, a copy of which was reviewed by ET.
The court had rejected the first application in September on grounds that it would not be justified in entertaining the petition.
"It is for the banks to consider what eligibility criteria should be adopted for engaging legal professionals," a division bench comprising Chief Justice Mohit Shah and Justice MS Sonak said while dismissing the petition.
Girish Dave, a senior advocate representing the IBA, said he is not aware of a fresh appeal
being filed after the first PIL was dismissed by the court
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