AIBEA seeks insurance for advances

Public-sector commercial banks are unnecessarily bearing the cross of deposit insurance and it should be stopped, said the All India Bank Employees' Association (AIBEA).

AIBEA says that there is a valid case for reducing the premium on deposit insurance as the claims experience is very good and the premium should be charged only on the amount of insurance cover and not on the total deposits.

Alternatively, the government can look at insuring the loans advanced by the banks so that the loan write offs, provisions for bad loans could be avoided, he added.