Rs 4,828 crore, over 82% of operating profit spent on bad debt settlement
The Reserve Bank of India (RBI) appointed Yogesh Dayal as the director of the board of directors of the RBL bank for 2 years, which is seen by analysts as “government intervention to save the private bank”.
Following this, the All-India Bank Employees Association (AIBEA) – the largest banking union in India wrote a letter to Finance Minister Nirmala Sitharaman asking him to merge the RBL with a public sector bank.
âIt is observed that the total advances from this bank have doubled in recent years. From around 29,000 crore rupees in 2017, it has crossed 58,000 rupees at present. There are also reports that the Bank has abused retail credit, micro finance and credit cards and as a result has burned its finger, which has weakened the financial position of the Bank. Against the background of the problems faced by private banks like Yes Bank and Lakshmi Vilas Bank last year, we urge to immediately intervene in the matter in the Interest of the depositors of this private sector bank and consider the necessary measures, in particular a merger of this bank with a public sector bank â , indicates the letter.
Speaking to the National Herald, Secretary General of AIBEA, CH Ventakchalam said that “bad debts and gross non-performing assets (GNPA) of the bank have increased in recent years”.
âIn 2017, the bank’s gross NPA was only Rs 357 crore and today it is over Rs. 2,600 crore,â Ventakchalam said.
After the analysis, AIBEA calculated: In 2020 and 2021, operating profits were Rs 2,752 crore and Rs 3,091 crore respectively. According to the data, Rs 2,246 crore and Rs 2,583 crore were spent on bad debt settlement after which the net profit for the two years was Rs 506 crore and Rs 508 crore respectively.