HYDERABAD, Jan 29 : Presenting the suggestions for the consideration of the government during the ensuing Union Budget 2025-26, All India Bank Employees’ Association (AIBEA) on Wednesday urged Finance Minister Nirmala Sitharaman to increase the rate of interest on Savings Bank Deposits to 6 percent per annum and additional 2 percent should be given to the Savings and Fixed Deposits of senior citizens.
In a letter to Sitharaman, a copy of which was e-mailed to UNI, AIBEA General Secretary Ch Venkatachalam said Public Sector Banks should not be privatised and the Government holding shall always be 51% and above.
He said the decision to sell the IDBI Bank should be shelved. As per the assurance given in the Parliament, a minimum of 51% of the capital of IDBI Bank should be held by Government.
Venkatachalam said after the merger of Public Sector Banks, many branches stood closed due to rationalisation and such closed branches’ licenses should be utilised to open more branches of PSBs in rural and unbanked areas. Private Banks are opening more Branches than public sector Banks. This is not desirable, he said.
The AIBEA General Secretary said the appointment of Workmen Employee and Officer Directors on the Boards of Public Sector Banks as per the scheme evolved under the Banking Companies (Acquisition and Transfer of Undertakings) Act, to be done. These posts are vacant for the past more than 10 years.
For MSME sector, he said a special package is to be given for their overall revival, which has been quite dormant since the Covid pandemic. Tax concessions shall also be extended to them, and loans should be given to small businesses at a simple rate of interest of 6% per annum.
Public Sector Banks have collected about Rs. 35,000 crores in the last three years as penalty for not maintaining minimum balance in their account. Banks should be advised to stop this fleecing of the customers.
On the Bad Loans, Venkatachalam said Willful default of bank loans should be termed as criminal offence and defaulters should be prohibited from contesting in all the elections viz., local body, legislative assembly or Parliament or to become Ministers.
To recover the huge Non-Performing Assets of the Banks, the Government should constitute more Debt Recovery Tribunals and Fast Track Courts with more powers for targeted recovery and this should be announced in the budget.
On Agriculture and Education Loans, the top Union leader said the Banks should extend agriculture loan at the rate of 2% (simple) per annum and education loan at concessional rate of interest to the poorer sections of the people at the rate of 5% (simple) with interest subvention.
On the Bank Mitras/Banking or Business Correspondents, he said, ”Bank Mitras” or “Banking Correspondents” or “Business Correspondents”, who bring the banking transactions to the doorsteps in villages, hamlets, and rural places, shall have to be engaged by the banks directly and they shall be treated as “workmen” of the banks.
On Regional Rural Banks, Venkatachalam urged Sitharaman to ensure proper credit to rural population and agricultural sector, and the infrastructure of Regional Rural Banks (RRBs) shall be better utilised by merging them with the sponsor banks.
On Microfinance, Venkatachalam said there should be a cap on rate of interest on loans extended by Microfinance institutions.
On the issues relating to Bank Employees and Retired Bank Employees, he said the tax deduction limit of income tax was increased from 10 per cent to 14 percent on employer’s contribution to the NPS account for State Government Employees by bringing them on par with the Central Government employees. For bank employees and officers, the bank managements are contributing 14% to NPS and hence, it is requested that the tax deduction limit of income tax upto 14% on employer’s contribution to NPS be extended to bank employees and officers also.
The AIBEA General Secretary also urged the Finance Minister that Medical insurance premium being paid by the retired bank employees and officers as well as the premium being paid by bank managements in the case of in-service employees, be exempted from the purview of GST.
He said the ceiling on gratuity is to be enhanced to Rs 25 lakh under the Payment of Gratuity Act, 1972, in tune with the ceiling of the Government employees.
(UNI)
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