Bombay High Court asks Central Bank of India to file affidavit in a PIL filed by Sawant

Moneylife Digital Team 09 March 2015

Sawant, a popular union leader from Central Bank of India, has raised in his PIL the issue of bulging NPAs of state-run banks and lack of action by the lenders as well as government and regulators

The Bombay High Court, while admitting a plea by Subhash Sawant, a union leader from Central Bank of India, has asked the Bank to file an affidavit within two weeks. Sawant had filed a public interest litigation (PIL) against, the Union government, Ministry of Finance, Reserve Bank of India (RBI), Central Vigilance Commission (CVC), the Bank, Central Bank Employees Federation and Indian Banks' Association (IBA).

Sawant, the General Secretary, of Central Bank Employees Union, has been actively raising his voice against the rising non-performing assets (NPAs) in public sector banks (PSBs) and its inept handling by the bank officials for many years. His relentless battle in the past exposed the dubious dealings of the Bank's former chairperson Homai Daruwala.

Earlier, in May 2014, the All India Bank Employees Association and in July 2014, the Bank Employees Federation of India issued releases containing names of several clienteles of public sector banks who have defaulted in repayment of the loans running into thousands of crores of rupees.

Subsequently, in October 2014, Sawant issued a press note detailing names of various borrowers of Central Bank of India who have defaulted in repayment worth thousands of crores of rupees.

Sawant retired from the Bank in 2009 but continues to be agitated about the impact of rising bad loans. He has been creating awareness among the public about how funds are being doled out to chosen industrialists.

On 3rd November, the Bank issued him a notice for failing to maintain good conduct as a retired employee and providing ‘misleading information’ to the media about bad loans and their recovery. If the action is taken to its logical conclusion, Sawant’s pension and benefits from the Bank would be affected.

Sawant, however, stated in the petition that he issue he is raising is about NPAs of state-run banks and lack of action by the lenders as well as government and regulators. He clarified that personal issues with the Bank should not be clubbed with the PIL and he will take appropriate steps in his personal capacity.

Central Bank of India, has had many controversial chairpersons, including Daruwala, who only got a ‘letter of displeasure’; but it is attempting to silence a bold union leader by threatening his pension. In order to understand why the Bank wants to silence Sawant, take a look at the massive bad loans that he has been drawing attention to.

Just 16 corporate groups account for bad loans of Rs4,255 crore in Central Bank of India. Of these, one particular loan is probably making the Bank’s senior management very jumpy—it is the outstanding of Rs316 crore to Sujana Towers, a company belonging to the recently inducted minister, YS Chowdary, of the Telugu Desam Party (TDP). The Bank claims that Sujana Towers is not an NPA when it is. The table reads like a list of the more outrageous rip-offs of Indian banking by corporate India. It includes the notorious Winsome Diamonds and Forever Diamonds. Three companies belong to the S Kumar group whose promoters continue to be rich, while they owe big money to lenders. Then there is Kingfisher Airlines with dues of Rs365 crore, the Housing Development and Infrastructure Ltd and others.

As a consequence of the support lent by Bank insiders to the whistleblower, the charges against Ms Daruwala were proved. The Bank spent Rs70 lakh in defending her through the politically-connected Abhishek Manu Singhvi (he was paid Rs50 lakh in fees).

In December 2014, Sawant filed a PIL seeking the Bombay High Court’s ‘interference and directions’ for effective loan recoveries in PSBs and ordering them to recover the loans that their clients have defaulted on.

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Comments

User

P b Sarma

1 decade ago

All big ticket NPAs are nothing but siphoning off public deposits into unviable projects of politicians and keeping quiet.Govt does not want to recover these loans with stiff measures but wants to penalise staff by giving less salaries and levy higher service charges on innocent public.

Veeresh Malik

1 decade ago

Good job by Mr. Sawant. As a constituent member of Central Bank of India with a bank account with them for 48 years now (since 1967 with the same branch) I would like to join Mr. Sawant as co-petitioner if possible.

Vaibhav Dhoka

1 decade ago

All petty are small account holders should support Mr Sawant in his PIL about NPA. This.This rise in NPA will give rise to increased service charges by members of IBA followed by non members.