CORPORATION BANK EMPLOYEES' UNION (REGD.)

CORPORATION BANK EMPLOYEES' UNION (REGD.) (Central Office : Mumbai) Mangalore Office : CBEU Golden Jubilee Hall, I Floor, Opp. Sharada Vidyalaya, P.V.S. Kala Kunj Road, Kodialbail, Mangalore - 575 003. Ph : 4279303. E-mail: corpunioncbeu@yahoo.com Circular No.08/2014 PLEASE CIRCULATE 25 th March, 2014 Dear comrades, Sub:- Banking License to Corporate houses Comrades are aware that the Bank employees are on warpath against Government/RBI move in issuing Banking Licenses to the private Corporate/Business houses. Undeterred by the vociferous protests from the Bank employees, the Government/RBI had constituted a Committee headed by Dr. Bimal Jalan, the former Governor of RBI to go into the whole gamut of issuance of Bank Licenses to the Corporate/Business houses and submit its report. Accordingly the Committee has submitted its report to the Government/RBI and much to the chagrin of Bank employees, the Government/RBI contemplates to issue the Bank Licenses despite negative opinion expressed by various agencies and also Parliamentary Standing Committee on Finance consisting of main political parties. But in view of the ensuing elections, the RBI has referred the matter to the Election Commission to get their approval to go ahead with the issue of licenses. Therefore, our parent organization AIBEA has written a letter to the Chief Election Commissioner stating that issuance of banking licenses to corporate and business houses is a clear retrograde move and urged upon the Chief Election Commissioner not to give permission to Government/RBI to issue Bank licenses to private corporate / business houses detailing therein the impending dangers to the Indian Banking Industry. AIBEA has also written a letter to the Chief Election Commissioner demanding for a specific provision to debar and disqualify candidates from contesting in the ensuing elections to the Lok Sabha, if they or the companies in which they are connected are defaulters of loans to Banks. AIBEA has also directed its affiliates to send similar letters to the Chief Election Commissioner. As per the directions of AIBEA we have already addressed the above letters to the Chief Election Commissioner. The circular along with the above letters addressed to the Chief Election Commissioner, issued by AIBEA are reproduced for the information of our membership and we request our Branch Secretaries to circulate the same amongst the membership in their respective units and educate them on these vital issues. With greetings, Yours comradely, (VINCENT DíSOUZA) General Secretary 1

CIRCULAR LETTER NO. 27/54/2014/10 22 nd March, 2014 To All Office Bearers / State Federations / All India Bankwise Organisations: Dear Comrades, Protest against issuance of Banking License to Corporate houses Units are aware that as part of the banking reforms agenda, the Government has pursuing various issues like reducing Government's equity in public sector banks, encouraging private and foreign banks, diluting rural and social banking, etc. Another important effort has been the attempt to grant banking license to business and corporate houses. It is well-known that prior to nationalization, the very same corporate houses were owning various Banks in our country and it is history as to how they mismanaged the banks and misused people's money. Today when the banking sector has so much expanded, these people again want to enter banking business. It cannot be forgotten even today that the bulk of the bad loans of the Banks are attributable to these big ticket borrowers and the corporate houses. It is a shameful irony that when in the recent years, the banking sector in many parts of the world, particularly in USA has faced debacle and many private Banks have collapsed or had to be bailed out with tax-payers' money, our Government is in a hurry to grant banking license to the private business and corporate houses. In many parts of the world, where the Corporates were given banking licenses, the model has been a failure. Many experts have given their opinion that the Government and RBI should not go ahead. Even the Parliamentary Standing Committee on Finance has submitted its unanimous report with the following conclusions: "Banking being a highly leveraged business involving public money and public welfare, the Committee are of the considered opinion that it will be more in the fitness of things to keep banking and industry separate. The Committee therefore desire the Government / Reserve Bank of India to review the licensing guidelines accordingly." But despite all these views and opinions, the RBI, obviously at the instance of the Government, has decided to go ahead with the grant of banking licenses to the private corporate and business houses. It is reported that in view of the ensuing elections, the RBI has referred the matter to the Election Commission to get their approval to go ahead with the issue of licenses. Hence, from the AIBEA, we have addressed a letter to the Chief Election Commissioner urging upon him not to give their permission to the RBI to issue these banking licenses pending election of the new parliament and formation of the new Government. The new Government which will come in power can apply their mind and reconsider the decision. Hence it is necessary to await till the elections are over and wait for the new Government to take a view. 2

We request all our unions also to write similar letters to the Chief Election Commissioner. We must also get ready for other programmes, if the Election Commission gives their nod and RBI chooses to go ahead with the new banking licenses. The draft of the letter to be addressed the CEC is given herein. With greetings, Yours Comradely, C.H. VENKATACHALAM GENERAL SECRETARY Nobel laureate Joseph Stiglitz said corporates should not be allowed to enter banking space as it has the potential to create conflict of interests. Allowing corporates to run banks may be "a risky move," said the former Chief Economic Advisor (CEA) to the Union Government, Arvind Virmani. Shri. V.S. Sampath, Chief Election Commissioner, Nirvichan Bhavan, Ashoka Road, New Delhi - 110 001. Sir, Banking License to Corporate houses This is to draw your attention to the recommendations sent to the Election Commission by the Reserve Bank of India seeking its permission to grant banking licenses to private business and corporate houses. You are well aware that banking sector has seen a metamorphosis and transformation after the Banks were nationalized in 1969 and 1980, and today public sector banking has become the backbone and mainstay of country's economic development and progress. While there is need to strengthen and expand public sector banking, the Government has been pursuing various agenda like privatization, mergers, opening up the banking industry to private and foreign capital, etc. The Government also wants to grant licenses to private business and corporate houses to start their own Banks. We learn that the RBI which is processing the applications, has recommended to the Election Commission to permit them to issue the new banking licenses without waiting for the new Government to the formed. In this regard we wish to point out that the Parliamentary Standing Committee on Finance, after threadbare deliberations, has submitted its unanimous report with the following conclusions: "Banking being a highly leveraged business involving public money and public welfare, the Committee are of the considered opinion that it will be more in the 3

fitness of things to keep banking and industry separate. The Committee therefore desire the Government / Reserve Bank of India to review the licensing guidelines accordingly." All are aware that the Standing Committee on Finance consists of 31 Hon. Members of Parliament representing almost all political parties including Shri Yeshwant Sinha, leader of BJP, Shri Rahul Gandhi of Congress Party, Shri Gurudas Dasgupta of CPI and MPs from CPI-M, TMC, SP, BSP, Shiv Sena, NCP, BJD, AIADMK, etc. Thus it can be clearly seen that there is a political consensus on this vital issue that granting banking license to the corporate industrial houses would result in conflict of interest and banking institutions which mainly leverage on the savings of the people, cannot be left to the corporate whims. It is our bitter experience borne out of bare facts that a very large part of the bad loans in the Banks today are constituted by huge loans taken by the private corporate sector and business houses most of which are willful defaults. Prior to nationalization of the Banks in 1969, most of the Banks in India were owned by one or the other industrial or business house. Their mismanagement and abuse of people's money resulted in nationalization of Banks. Hence, handing over banking licenses to corporate and business houses is a clear retrograde move. Particularly, when the country is moving towards general elections to elect a new Parliament, RBI's hurry in this regard overlooking the political views of the Parliament would be unfair. We urge upon you to appreciate the above viewpoints and not give any permission to the RBI to go ahead with granting of banking licenses to the corporate houses. Thanking you, Yours faithfully, General Secretary CIRCULAR LETTER NO. 27/53/2014/9 18 th March, 2014 To All Office Bearers / State Federations / All India Bankwise Organisations: Dear Comrades, Debar Bank Loan Defaulters from contesting in elections Units are aware that AIBEA has been championing the struggle against alarming increase in bad loans, particularly by the wilful defaulters and against the nexus that is responsible for these delibately created bad loans. Besides various demands of AIBEA on this issue, we have been demanding that Bank loan defaulters should not be allowed to contest in elections and should be debarred from holding public offices. 4

Accordingly, AIBEA has written a letter to Chief Election Commissioner that the nominations of candidates who are loan defaulters in Banks should be rejected and the rules regarding disqualification as provided in the Constitution and Representation of People Act, 1951 should be suitably amended for this purpose. All our units - State Federations, All India Bankwise Unions, State-level Unions, Unions in Co-operative Banks and RRBs, District and Town Associations, etc., are also requested to write letter to the Chief Election Commissioner as per specimen given herein. Since the general elections are going to be held shortly, all our units are requested to send these letters immediately under copy to AIBEA. With greetings, Yours Comradely, Shri V.S.Sampath, Chief Election Commissioner, Nirvichan Bhavan, Ashoka Road, New Delhi - 110 001. Sir, C.H. VENKATACHALAM GENERAL SECRETARY Sub:- Debar Bank Loan Defaulters from contesting in elections Since the General Elections are going to be held shortly, we wish to draw your attention to the following. You are aware that in the recent years, bad loans have increased alarmingly as under: 31.03.2008-39,030 crores 31.03.2009-44,954 crores 31.03.2010-59,927 crores 31.03.2011-74,664 crores 31.03.2012-1,17,000 crores 31.03.2013-1,64,461 crores In addition, every year huge amounts of profits of the Banks are being utilised to provide against bad loans: For 2008-2009 : 11,121 crores For 2009-2010 : 18,036 crores 5

For 2010-2011 : 29,380 crores For 2011-2012 : 38,177 crores For 2012-2013 : 43,102 crores For last 5 years : 1,40,266 crores Further the following huge amounts of bad loans have been actually written off: For 2008-2009 - 15,995 crores For 2009-2010 - 25,010 crores For 2010-2011 - 23,895 crores For 2011-2012 - 20,892 crores For 2012-2013 - 32,218 crores In last 5 years - 1,18,010 crores What is disturbing is that amounts involved in willful default of bank loans are also increasing. Some of these defaulters are holding high positions. One of the borrower company in which a Central Minister is directly connected is also a defaulter to the tune of 350 crores. Two top loan defaulters are Padma Sri Awardees and owing to Banks 930 cores and 580 crores respectively. Another top defaulter is a member of the Rajya Sabha owing to the Banks more than 6000 crores. Hence, besides various other existing disqualifications as provided under the Constitution and the Representation of People Act, 1951, a specific provision should be added to debar and disqualify candidates from contesting in the ensuing elections to the Lok Sabha, if they or the companies in which they are connected are defaulters of loans to Banks. We seek your urgent attention in this regard for doing the needful. Thanking you, Yours faithfully, General Secretary Phone Nos. STD Code : 0824 Office Resi. Mobile Walter Lasrado 2426416 4282958 9845295820 Vincent D Souza 2426416 2217959 9448214965 B.N. Rajaji 2426416 2224949 9449024949 Govardhan Prabhu 2263335 2258547 9945619550 M. Nagaraj 2426416 2218139 9449028139 Central Office, Mumbai 022-22675043 Fax: 22655043 6