New Delhi, March 26 (IANS) Aam Aadmi Party MP Raghav Chadha criticised the ‘Banking Laws (Amendment) Bill, 2024’ during discussion in the Rajya Sabha on Wednesday, terming it a ‘paper reform’ that fails to address the real issues faced by the common people.

Chadha argued that the bill is limited to procedural changes and does not tackle core problems like banking fraud, loan recovery challenges, and the increasing pressure on bank employees.

“Banks are not just financial institutions; they are the foundation of democracy,” he said.

Chadha further said: “From the savings of the common man to farmers’ loans, from youth education to elderly pensions -- banks touch every aspect of life. But rising cases of banking fraud and loan frauds are eroding public trust. Today, people are afraid to rely on banks.”

He pointed out that home loan interest rates in India range from 8.5 per cent to 9 per cent, while education loans can go up to 13 per cent, making it difficult for young people to pursue higher education.

“Students are drowning in debt even before they start earning. MSME loans carry interest rates of up to 11 per cent, making business expansion challenging for small entrepreneurs,” he added.

Chadha suggested that the government should cap interest rates on education and home loans and offer subsidised rates for first-time home buyers. He also urged the RBI to promote competition by encouraging small and digital banks to reduce borrowing costs.

Expressing concern for senior citizens, he noted that fixed deposit rates are around 6.5 per cent while inflation stands at 7 per cent, eroding their life savings.

“A minimum interest rate of 8 per cent should be guaranteed for senior citizens to protect their savings from inflation,” he proposed.

On the issue of digital banking fraud, Chadha warned of rising cybercrime. “In the financial year 2024, India recorded 36,075 cases of banking fraud, with digital payments and loan fraud accounting for the majority. Cyber fraud alone caused a loss of Rs 2,054.6 crore,” he stated, citing official data.

He added that UPI fraud increased by 85 per cent in 2024, further jeopardising public confidence.

“The banking system is the biggest support for the common man. Yet, its falling credibility and lack of transparency are making people feel insecure,” Chadha said, urging comprehensive reforms to restore trust and safeguard citizens’ interests.

--IANS

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