Sunday, November 23, 2014

Babas,Babus, Bankes And Borrowers

There are some media men who are continuously trying to malign entire community of saints, babas and spiritual gurus of the society of various sects and religions especially that of Hindus after the exposure of Baba Rampal . There is no doubt that Baba Rampal crossed the limit of a saint and has tarnished the image of a saint by indulging in illegal activities in the name of humanity and religious Samagams. Asharam Bapu also tarnished the image of saint and reportedly indulged in sexual exploitation of followers. Similarly Nirmal Baba has also been cheating his followers by promising to cure the sickness of followers in his own style. There are many saints who in the name of religion cheated followers in the past and who have been are cheating their followers in current days too. But it does not mean that the entire community of saint are curse on the society.

Rather it is saints and religion of mankind who provide relief to lacs and crore of people who suffer in various hardships. Not to speak of common men , even ministers and Prime Ministers have imposed faith in such saints and sought the blessings of saints of their choice to achieve their targeted goal. Ministers and politicians of all parties use to visit Samagams of various saints to seek their blessings. If in future it is proved that a particular saint was cheater and indulged in evil works , it is not the fault of visitors.

After all, it is the image of a saint which attracts and pulls crowd towards it. Late Indira Gandhi also became victim of Chadra Swami during her tenure of PM. All human beings including stars and ministers are swayed away by sentiments and faith in religious values. Clever saints as also politicians many times try to exploit these sentiments to serve their vested interest in immoral and illegal ways. There is no doubt in it that all evil persons including saints and politicians must be punished for their evil works and entire community or class should not be blamed for heinous work of few individuals. Government has to develop system which keep close watch on all activities of the society in tactful way and properly monitor them to nip evil elements when they are in bud stage.

Even when doctors fail to cure the pain of a sick person it is only saint who provide relief only by few good words of faith in God. A few fraud minded persons and cheaters who in disguise of saint play foul game with his followers cannot be allowed to stop the good work being done by numerous really good and pious saints who devote their entire life on the welfare of mankind. No one has the right to blame entire saint community or babas or maulvis.

There are many media men who give wrong , false and biased news after taking illegal money . There are many journalists who have taken franchise of publishing paid news without caring for the safety and security of the country and common men. Many journalists misuse freedom granted to them by democratic principles and are habituated to torture and tarnish even good performers just to please their political patrons. On the contrary ,There are good journalists too in the field of media who do many good jobs and who expose ugly works of so called popular leaders. As such it will be unwise to blame entire media community for evil works of few journalists.

Doctors are suppose to serve sick persons but they commit fraud by stealing kidney or forcefully and illegally performing unwarranted and avoidable surgical operation to earn money from ailing persons. Many Doctors have been found to be casual in their work and accused to causing death to patients. But it does not mean that entire Doctor community is ill-motivated. All doctors who commit crime in eyes of law must be punished in no loss of time.

Bankers are supposed to lend money to weaker section and to business houses to do social welfare activities as well as to increase profit of the bank , But few bankers are indulged in making money for them and their families and it is they who contributed bad assets to a great extent. But can anyone blame entire banker community for present sickness of public sector banks?

Persons who take loan from banks are called as Borrowers . Few borrowers do not repay the loan in prescribed time or wilfully do not repay .Volume of bad asset in banks is on rise  quarter after quarter.  But can bank stop loaning activity? Need of the hour is to declare bad borrowers as criminals and punish them in no loss of time to create a repaying culture . It is the need of the time to distinguish defaulters with valid reasons and defaulters with invalid reasons honestly and take curative or punitive action to bring about real reform in banking.

Millions of people drive vehicles on road but few of them become victim of accident either due to own fault or due to fault of others. But it is not desirable to conclude that driving is dangerous and should be stopped.

We remember how a personal security guard of Indira Gandhi killed her in her own house. It just not say that all security guards are unreliable. There are many teachers who during the course of teaching developed illicit relation with the students and many of them even raped girl child. Such incidents come to light in all towns and cities . But it does not force us to conclude that all teachers are unreliable.

Police force is meant to provide safety and security to citizen of the country. But many police personnel misuse their power and exploit money from people who go to them for redressal of their grievances. Police more often than not, torture good citizens and support bad ones for earning illegal money in their style. But still there are many more good police personnel who are exercising their duty faithfully and devotedly for the safety of people of their areas.

Many political leaders ,ministers and important persons of the country who are reckoned as good leaders in their field are also found to be indulged in illicit relation with woman, indulging in forced sexual relations, and commit moral sin during their course of public relation. But can we say that all politicians and all ministers and all public representatives are unreliable and cheaters?

Ministers and important political leaders of the country are found to be indulged in corruption and have looted lacs of crores of rupees of public fund. Ministers and public servants have caused loss to the tune of lacs of crores of rupees to various departments. Even then we cannot blame entire community of government servants or ministers for crime committed by few public servants or ministers. It is the duty of the government to weed out such evil persons and suitably punish them .

There are many domestic servants who have been found guilty of committing sexual crime with children of the home they served or found guilty of stealing costly goods of the house. For such mischievous servants , no one has right to abuse and accuse entire servant community. Many judges in courts are found guilty of having illegal sexual relations or earning illegal money in awarding judgement in favour of bribe giver. There are good or bad persons in every society , every groups and very organisations in all countries.

Need of the hour is to say spade a spade. It is the duty of state or central government to make such a strict arrangement of audit and inspection that all evil persons are punished in shortest span of time. For this purpose government have to provide adequate quality manpower and favourable infrastructure to all police stations, courts, CBI and all departments which are assigned the duty of finding out criminals and punishing them after completing due course of actions in this regard.

GOI have to create adequate and perfect public information system, crime detection system and judicial system to punish really criminals without any bias to caste, community , region or religion. GOI will have to stop discriminatory treatment and have to send a message by real action all over the country that there is no leniency in punishing to crime doers.

Similarly media men who work as agent of some party or the other and who are agent of some caste or community should stop their evil motivated campaign against saint of particular community and exempting that of other community. Politicians who play dirty politics on all incidents merely from vote angle should also be discarded and condemned by right thinking citizens of India. There are black sheep in all fields and it is the duty of all responsible persons and institutes to trap them in net and ensure that they are taken to task without affecting good people of the country.

Saturday, November 22, 2014

Bank Staff Call for Zone Wise Relay Strike For Wage Hike

Bank unions plan zone-wise relay strike from Dec 2-HBL
Vadodara, Nov 22:  
Employee unions of public sector banks across the country will go on zone-wise relay strike from December 2 to 5 to press for wage revision.
The public sector bank employees had stopped work on November 12 on the wage issue, affecting services like cheque clearance and withdrawal from branches across the country. The strike call was given by United Forum of Bank Unions (UFBU).
“After the nationwide stir (on Nov 12), we are moving close to our next action — that is relay zonal strike scheduled from December 2 to 5.
“This will be first such strike in the banking industry,” C H Venkatchalam, General Secretary, All India Bank Employees Association (AIBEA) told PTI.
AIBEA is a major constituent of UFBU, an umbrella organisation of nine bank employee and officer unions.
According to the programme finalised by the unions, the strike will be preceded by demonstrations in each zone.
Bank employees of Southern Zone will be the first to go on strike, on December 2, followed by Northern Zone (Dec 3), Eastern Zone (Dec 4) and Western Zone (Dec 5), said Venkatchalam.
“We hope the IBA (Indian Banks’ Association) and the Government would understand the seriousness of the issue and initiate steps to resolve it at the earliest.
“In the event of the issue remaining unresolved, we may be forced to resort to more strike actions, including indefinite strike, in the days to come,” he warned.
The wage revision of public sector bank employees has been due since November 2012. While the unions demanded a 25 per cent rise in wages and later scaled it down to 23 per cent, the IBA stuck to its position of 11 per cent increase.
There are 27 public sector banks in the country with employees’ strength of about 8 lakh. There are about 50,000 branches of these banks across the country.

Jaitley against burdening salaried, middle class-Business Standard

He said he would encourage more money being put in the pockets of tax payers that will lead to spending
Finance Minister Arun Jaitley today said that he does not favour burdening the salaried and middle-class with more taxes but would go after the evaders in widening the net.

In fact, he would encourage more money being put in the pockets of tax payers that will lead to spending and collection of more indirect taxes.

"This widening of the tax base. What does it mean? ...I pay the same indirect tax as my attendant. Our volume of consumption may be different. So everybody is paying indirect taxes.

"And literally almost half your taxes are indirect taxes today. He pays excise, he pays customs duty, he pays service tax. Now as far as income tax is concerned, to bring those who evade tax is widening the tax net, I am all for it," the Minister said in an interaction with PTI journalists at PTI headquarters.

He was replying to a question on whether his budget would look at widening the tax base to maximise revenue.

Jaitley, who will be presenting his first full fledged budget in February, said that in his last budget he had increased the tax exemption limit from Rs 2 lakh to Rs 2.5 lakh and would even raise it further if he had more money.
RBI warns public about fraudsters issuing credit cards in its name-HBL
Mumbai, Nov 21:  
Reserve Bank of India on Friday alerted the public about fraudsters perpetrating fraud by issuing credit cards in its name.
Explaining the modus operandi, the Reserve Bank stated that the gullible member of the public is sent a credit card which allows withdrawal of money up to a certain limit, albeit a small sum, from a bank account.
Having gained the confidence of the victim thus, the fraudster gets him to deposit a huge sum of money in the same bank account. Once the money is deposited, the card stops working and that would also be the last time the holder of the card (victim) would hear from the fraudster, the RBI said.
Warning against such efforts, the Reserve Bank reiterated that as India’s central bank, it does not carry out any business with an individual, whether through savings bank account, current bank account, credit card, debit card, online banking services or receiving and holding funds in foreign exchange or any other form of banking services.
Reserve Bank has listed out the other kind of prevalent frauds, such as: fictitious offers of large sum of money/lottery winnings by email or through phone calls by posing as RBI official and fake Reserve Bank website for online transactions
Further, fraudsters lure members of public to secure their bank accounts against such frauds by asking them to share the bank account details, including user id/password, through an email or by clicking on a link given in email.
They also make offers of employment in the Reserve Bank through email
The Reserve Bank has also stated that fictitious offers are also made in the name of other public institutions, such as, International Monetary Fund (IMF), Income Tax authorities, Customs authorities or public figures like Governor, Dr. Raghuram Rajan or other senior RBI officials.
The Reserve Bank has pointed out that once the money is paid in fraudsters’ accounts; there are remote chances of the members of public recovering the money.
The Reserve Bank has cautioned members of public that falling prey to such offers can result in compromising one’s own crucial personal information that may be misused to cause direct financial and other loss to them.
The public, in their own interest, should refrain from responding to such offers in any manner. Rather, they should immediately lodge a complaint with Cyber Crime branch of the Police.
48 new power projects approach banks for ₹1.5-lakh cr funding
New Delhi, November 21:  
The power sector leads the race in seeking bank loans for new projects with investment proposals of over ₹1.50 lakh crore. This despite the sector facing problems of stranded assets and fuel supply constraints.
Across 20 sectors, including power and real estate, banks have received proposals for 194 new projects between January 1 and September 30 with an investment of over ₹4.68 lakh crore.  Each of these projects entailed an investment of ₹250 crore or more, according to data collected by the Finance Ministry.
Though the power sector is behind commercial real estate in terms of number of projects, the size of investments in higher. The projects include generation, transmission and distribution, and new and renewable energy.
Sesa Sterlite leads the pack with plans for a ₹16,000-crore project in Odisha. The proposal is with Syndicate Bank, which has already sanctioned and disbursed₹1,525 crore. This is followed by Teesta Urja in Sikkim with an investment of ₹11,382 crore, Talwandi Sabo Power in Punjab (₹11,040 crore), Bhushan Power and Steel in Odisha (₹9,765 crore) and East Coast Energy in Andhra Pradesh (₹9,343 crore).
Credit off-take
A large number of projects approaching banks will give some boost to credit off-take, it is felt. According to the data, gross advances of public sector banks has recorded a year-on-year growth of 9.06 per cent against 18.8 per cent as on September 30, 2013. At a recent meeting, Finance Minister Arun Jaitley had asked bankers to take steps to increase credit flow to various sectors.
Jaitley expressed hope that credit growth will pick up in the second half of the fiscal.
The commercial real estate sector has 67 projects with a total investment of around ₹82,000 crore. This includes Wave Megacity Centre in Uttar Pradesh with an investment of ₹8,764 crore, Navi Mumbai SEZ in Maharashtra (₹6,300 crore), Parsvanath Rail Land Project in Delhi (₹4,568.72 crore), Raghuleela Builders in Maharashtra (₹4,076 crore) and Nava Raipur Development Authority (₹3,590 crore).
Campaign boost
With the Make in India campaign, the number of new projects/proposals seeking funds from public sector banks is likely to go up. The new campaign is being complemented by a liberal FDI regime, particularly in Defence and Railways, as well as easing of environmental procedures, a senior Finance Ministry official said.
The power sector also tops the list of unresolved or stalled projects. The Finance Ministry, quoting data as on November 19 from the Project Management Group in the Cabinet Secretariat, has listed 93 unresolved or stalled projects, of which 33 belong to the power sector.
Stalled projects
Under the unresolved or stalled projects category, State Bank of India has 22 projects with a cost of over ₹1.89 lakh crore, followed by IDBI Bank with 15 projects involving a cost of ₹15,000 crore and UCO Bank with two projects at ₹7,234 crore. Although no reasons have been given for the projects being stuck, it is understood that land acquisition, environmental clearances and fuel linkages are the key reasons.

Friday, November 21, 2014

Are Bankers Wilfully Tapering With Records To Save Punishment?

Supreme Court ruling on e-records is a timely reminder for banks -Hindu Business Line-22.11.2014

By  Vinson Kurian

Thiruvananthapuram, November 21:  

Banks will ignore at their own peril a Supreme Court ruling that electronic records without proper safeguards are non-admissible as evidence.
Computer outputs (printed on paper, stored, recorded or copied in optical or magnetic media produced by a computer) are “secondary”, the court said. These are susceptible to tampering, alteration, transposition and excision and a whole trial based on them could lead to a travesty of justice, it observed in a concurrent order on Civil Case No 4226 of 2012. Failings in the banking sector on this count are best reflected in the CAG findings pertaining to the farm loan waiver scheme of 2008.
Of the 9,334 cases taken for scrutiny, 2,824 records were found to have been tampered with, overwritten or altered.
Audit trails
Responding to an RTI query, the RBI told S Dheenadhayalan, an activist, that it had advised banks to identify key risks that threaten computerised banking operations.
Banks must develop or design adequate internal control policies and procedures to mitigate risks, the RBI had said in a circular way back in February 1998. All transactions must be entered and accepted “once and only once, data accurately entered, standing data changes authorised and accurately entered.”
Sufficient audit trails, it said, must be maintained and placed with security procedures so that they cannot be altered.
But not many banks, including those in the public sector, seem to have gone the distance to ensure compliance. For instance, Indian Bank, according to Dheenadhayalan, admitted under the RTI that at least one of its branches was in possession of a standalone computer. In March 2010, the bank told Deepak Flexo Packs of Virudunagar, Tamil Nadu, that it had revised the waiver claim on its account from ₹32.53 lakh to ₹5.84 lakh.
Related data on how it arrived at the figure could not be retrieved since the system had crashed, he said. Pressed further, the bank merely said it was an isolated incident because it had occurred in a standalone computer.
As for policy of providing standalone computers at branches, there existed none. In some cases, standalones were provided for training staff. Some banks use them for routine administrative work which need not be connected to or fall under electronic data processing (EDP).
Standalone does not imply parallel tracking of factual reports. These computers could be used to generate convenient statement of claims, according to Dheenadhayalan.
In another case, Punjab National Bank made an inadvertent error in notifying claims while invoking the Sarfaesi Act on Raju Industries, Bangalore. A corrigendum issued by the bank in June 2010, said the figure of ₹33.92 lakh quoted in the possession notice was a mistake, and it must be read as ₹12.60 lakh.
Vigilance Commission alert
The Central Vigilance Commission (CVC) was forced to take note of frauds perpetrated on banks using passwords of other employees.
The CVC observed in a circular dated November 30, 2010, that bank employees in certain cases were not maintaining secrecy of their passwords.
“Instances are still coming to our notice where frauds of large amount have been committed by misusing the passwords of employees,” it noted. It should be ensured that all employees maintain secrecy of their passwords and keep changing them as frequently as possible, the circular said, adding that banks may evolve systems and procedures to ensure the same.
Instances of casual approach by any password holder should be dealt with ruthlessly by the bank concerned as the same may put huge amounts of funds at risk, the CVC noted.
Chief Vigilance Officers, it said, may take suitable action and regularly monitor the secrecy of passwords and apprise the Commission of action taken. They should report compliance in the matter by including this aspect in monthly reports being submitted to the Commission.

Loan recast hides stress in banks

Times of India 22.11.2014
NEW DELHI: Banks seem to have undertaken massive restructuring exercise in recent months, which has helped them show lower bad debt.

Data collated by the finance ministry for a meeting of bank chiefs on Thursday reveals that in case of at least five state-run lenders, the ratio of assets which have turned non-performing or have been restructured is as high as one-fifth of their loan book.

By restructuring debt — through conversion into equity, extension of repayment period and other changes —banks have managed to ensure that these loans don't turn sticky. For instance, in case of Dabhol Power, banks have converted a part of their loans into equity and deferred immediate provisioning to report healthier finances although the company is not earning any revenue and therefore unable to pay installments.
So, Central Bank of India's gross NPA level may be 6.25% at the end of September, but if you look at the ratio of restructured loans and NPAs, it adds up to close to 20.5%. For the entire public sector banking segment the level is around 12.6%, when gross NPAs are 5.3% of the loan portfolio.

The prolonged economic slowdown has resulted in companies facing earning pressure, resulting in loan defaults. Among the various sectors, SMEs are at the top of the heap with 7.2% of the loans turning NPA, followed by large corporates at 5.55%. Despite the perceived stress, real estate is performing better with 1.8% of the loans turning sticky.

At 14.2% of the loans, the highest level of NPA is in the gems and jewellery space, where export demand has been hit by the slowdown in the US and Europe. Then come coal, a sector which is in the grip of controversy, and cement, which has been hit by excess capacity.
Saradha scam: Major embarrassment for Mamata as CBI arrests TMC MP Srinjoy Bose-IBN
Kolkata: In yet another blow to the ruling Trinamool Congress, party MP Srinjoy Bose has been arrested by the Central Bureau of Investigation in connection with the multi-crore Saradha chit fund scam.

Bose, who owns Bengali daily Sambad Praitidin, allegedly had stuck a deal with Sudipta Sen, the main accused in the Saradha scam. He is being probed for criminal conspiracy and misappropriation of funds, said CBI sources.

Bose was seen entering the CBI office around 11 am and after 6 hours of grilling, his arrest was confirmed only at around 4:30 pm. His arrest is being considered as the biggest in the case. He has been questioned by the CBI sleuths twice earlier also

The ED has frozen five bank accounts of Bose, of which three are personal and two are that of the company's. It has also begun the process of attaching Samvad Pratidin, the Bengali daily owned by Srinjoy Bose.

The CBI has also summoned TMC MP Hasaan Ahmed Imran for questioning in the case.

Under fire, the TMC has called CBI "political manipulated". Speaking to CNN-IBN, party MP Sougata Roy lashed out at the CBI as he said, "Srinjoy Bose's arrest is unfortunate, CBI is politically manipulated. TMC as a party remains strong."

Party chief Mamata Banerjee has demanded the arrest of the guilty. She said, "Why is the CBI not catching the real culprits of the Saradha scam? They should arrest those who are actually responsible of cheating poor people."

Another party MP Derek O' Brien tweeted, "The CBI is a political tool used by the previous government to settle political scores. Now the BJP is doing an action replay. They cannot combat the Trinamool politically. They have tried and failed. So what do they do? Let loose a discredited CBI."

The ED has also frozen two bank accounts held by painter Shubhaprasanna, a close aide of CM Mamata Banerjee. It has also frozen as many as 24 fixed deposits held by the painter. His possible involvement in the scam is under the scanner of the central probe agencies.

Bose's arrest comes on a day when another Trinamool leader Shyama Prasad Mukherjee was grilled by the CBI. West Bengal Transport Minister Madan Mitra was also asked to turn up for questioning but he didn't and checked himself into a Kolkata hospital.

Former Trinamool Congress MP Kunal Ghosh, one of the prime accused in the scam, attempted suicide in the Presidency prison in Kolkata last week demanding the arrest of the guilty.

Seven high profile arrests have been made in the case as of now. It includes Sudipta Sen, Debjani Mukherjee, ex-TMC MP Kunal Ghosh, ex-DGP,West Bengal, Rajat Majumdar, East Bengal Club official Debabrata Sarkar, Sadanand Gogoi who is a singer from Assam and businessman Sajjan Agarwal, other than Srinjoy Bose.

Mamata Banerjee had earlier in the month claimed that nobody from her party had taken money from chit fund-aided companies, and hit out at a section of the media for showing Trinamool leaders as "thieves".

Thursday, November 20, 2014

Outcome Of Finance Minister Meeting With Bank Chiefs

Jaitley asks PSU banks to support pending projects-The Hindu

Union Finance Minister Arun Jaitley has asked public sector banks to bring down their Non Performing Assets (NPAs). The ratio of gross NPAs to gross advances was up to 5.32 per cent at the end of September as against 4.82 per cent on September-end 2013.
The Finance Minister has also asked these banks to take steps for increasing the flow of credit to various sectors of the economy. He said he expected credit growth to pick-up as large number of projects were queuing up for loans. According to Reserve Bank data, credit growth fell to single-digit figures this fiscal.
Mr. Jaitley was addressing the quarterly review meeting of the heads of public sector banks and financial institutions and the meeting of the Steering Committee of the Pradhan Mantri Jan Dhan Yojna (PMJDY) here on Thursday.
The Finance Minister also said that the Government has taken steps to streamline the process of appointment of chief executive officers and executive directors of public sector banks with the aim of introducing objectivity in the process. He said that any external influence would be considered as a disqualification.
The Steering Committee review of the performance of the PMJDY noted that 20 per cent households remain uncovered across districts. The banks said they would cover these remaining households in sweep mode and also make special efforts to cover the uncovered households in 33 districts where the percentage of coverage is less than 50 per cent. It has been reported that out of 7.46 new accounts opened so far, nearly 75 per cent hold zero balance.
To make the country direct benefits transfers-ready, the committee asked the banks to increase the seeding of Aadhaar number in the accounts and be ready for rolling out the scheme in all the districts from 1st January, 2015
Appraise loan proposals without any fear or favour: Finmin to banks-Hindu Business Line The Finance Ministry has told public sector banks to appraise lending proposals without any “fear or favour’’.  
It also hopes that the ratio of bad debts (technically known as Non Performing Assets or NPAs) to advances will come down with improvement in the economy.
Credit growth
These remarks have come at a time when credit growth in the first six months of the current fiscal has slipped to 9 per cent from 18.8 per cent in the last fiscal.
Similarly, the ratio of gross NPAs to gross advances has surged to 5.32 per cent at the end of September 30, 2014 against 4.82 per cent in the same period last fiscal. Another issue is related with State Bank of India’s MoU with Adani group for a loan of $1 billion.
The Finance Minister, Arun Jaitley, today chaired a quarterly review meeting of public sector banks. “We have suggested to the banks proactive steps in supporting various projects, so that credit offtake with regard to these projects picks up in a big way. Of course, the banks are conscious of their responsibility,” Jaitley told reporters after the meeting.
The meeting was attended by the heads of public sector banks and financial institutions.
Rising bad loans
When asked about rising NPAs, the Minister said that over the last two to three years, on account of slowdown, one area of concern is that the NPAs have risen and “therefore what proactive steps to be taken to ensure NPAs come down have been discussed’’.
However, he did not give much detail about the new measures.
Later, giving brief details about the proceedings of the meeting, a senior Finance Ministry official termed NPA as a legacy issue and claimed that things will change now.
“It has happened because of a number of reasons. For the last 2-3 years, there were no good projects coming up. So, when the total asset size does not increase, naturally your percentage of NPAs will go up. These are all legacy issues. Now, when economy looks up, when new portfolio is generated by banks, these percentages will start coming down,” he said.
He mentioned that banks have been told to “go ahead and do your appraisal without fear or favour from anybody. We are saying that to do it objectively, do it professionally and so once quality of lending improves, this issue of NPA should not remain.”
Jan Dhan Yojana
There was a separate meeting on Pradhan Mantri Jan Dhan Yojana for financial inclusion, during which progress made till now and the ways ahead were ahead.
One of the major issues is that out of 7.46 new accounts opened so far, almost 2/3rd are with zero balance or dormant account, but the Finance Ministry and banks are hopeful that things will improve with the transfer of direct benefit through bank account.

Govt panel shortlists 10 for jobs of PSU bank chiefs

NEW DELHI: The Appointments Board headed by RBI governor Raghuram Rajan has shortlisted 10 candidates as heads of eight public sector banks, but rejected a move to shift the chairman and managing director of a small bank to a larger entity.

Sources said the names of 10 candidates, who were interviewed last week, have been sent to the Central Vigilance Commission for clearance. Once vigilance clearance is obtained, the names will be sent for processing by the Appointments Committee of Cabinet, comprising Prime Minister Narendra Modi and home minister Rajnath Singh.

At the same time, it has been decided that those executive directors, who have spent at least four years at a Group A bank, such as Bank of Baroda, Canara Bank or Punjab National Bank, will be in contention for a job of chairman and managing director (CMD) at one of the Group A banks. As a result, Dena Bank CMD Ashwani Kumar, who was also interviewed, will not be shifted to one of the Group A banks.
This leaves eight of the 10 executive directors in contention. Those who have been shortlisted include IDBI Bank deputy managing director B K Batra, who missed out becoming Union Bank of India CMD a few years ago. The others on the list include P Srinivas and B B Joshi, executive directors at Bank of Baroda, Arun Srivastava and P Koteeswaran of Bank of India, R K Goyal and Animesh Chauhan of Central Bank of India, K K Sansi and Mukesh Kumar Jain of Punjab & Sind Bank and Rakesh Sethi of Union Bank of India.

The government is keen to finalize the appointment of bank chiefs as several banks including BoB, PNB, Canara Bank and India Bank are headless. The finance ministry has been forced to rework the appointment process in the wake of widespread irregularities in the selection mechanism in recent years. Banks such as Syndicate Bank are without a full-time chief as its CMD S K Jain was arrested on corruption charges, while United Bank has been headless for months after Archana Bhargava resigned, citing health issues.

Appointing a PSU bank chairman-LiveMint

To stem the rot in public sector banks, the government should create a professional process for appointment
 BY   Krishnamurthy Subramanian
Following the arrest of S.K. Jain, the former chairman of Syndicate Bank, the government has modified the selection process for the appointment of chairmen of public sector banks (PSBs). This process has effectively added more layers of bureaucracy in the form of three screening committees (instead of one earlier). Rather than tinkering with a failed system, and possibly making it worse, the government needs to institute a process that incorporates the best practices for the selection of the leader of a PSB.
Unlike the case of a private sector bank, where the selection process follows an extensive search that is usually handled by an executive search firm, no search process is stipulated in the case of the selection of chairmen of PSBs. A shortlist is generated based on certain demographics of general managers in all PSBs, such as age, number of years of experience as general manager, etc. This shortlist is then screened for potential cases of corruption or vigilance enforcement. The shortlisted candidates are interviewed usually for 15-30 minutes before a decision is made on the eventual candidate. Given the difficulty in judging the candidate in such a short span of time, rumours abound about the outcome being pre-decided based on political affiliations/extraneous reasons.
Several aspects of the current process render it sub-optimal. First, government officers and regulators are unlikely to possess the skills necessary to judge the potential talent necessary for someone to lead a bank with assets of Rs.5 trillion or more. Banking is a very specialized activity, and top management needs to combine strategic foresight with a good commercial knowledge of sectors to lend to, prudent risk management and human resource skills. For highly skilled activities, selection by a peer group generally ensures that those who select have the ability and discernment to assess the required attributes.
For example, if the selection of the Indian cricket team for the forthcoming cricket World Cup is left in the hands of the Board of Control for Cricket in India (BCCI) administrators rather than the selection committee comprising former cricketers, one can only shudder to think about the potential performance of the team. Just like a cricketer representing the national team requires special skills, the chairman of a PSB also needs enormous skills of leadership, persuasion, risk management, people management, etc. Former cricketers who have played the game at the top level comprise the selection committee for the Indian cricket team. Similarly, only someone who has been the chief executive officer of a large bank can understand the skills required for the job. No bureaucrat, politician or regulator can possess the skill to judge whether or not a particular candidate has the necessary ability. The current perception that the selection by such a peer group is unnecessary for top management positions in PSBs fails to recognize the specialized nature of banking and (in the context of government appointments) lends itself more easily to abuse.
Second, the way the selection committee is presently constituted leads to inadequate interaction with the shortlisted candidates. Consider the process of appointment of assistant professors in research-oriented universities. Because research requires application of diverse skills, a prospective candidate spends an entire day meeting and interacting with every research-oriented faculty in the department for 30 to 45 minutes. The one-on-one interaction provides multiple opportunities for each individual faculty to evaluate the candidate. A follow-up discussion where each individual faculty shares his/her assessment of the candidate leads to a rich assessment of the candidate’s attributes. Similarly, interactions with each member of a selection committee, comprising former bankers, would better assess the potential for leading a bank.
The Nayak committee’s recommendations in this context are worth considering. Till the time that the boards of PSBs are professionalized, the committee recommended setting up of a Bank Boards Bureau (BBB), which would advise on top bank management selection. BBB will comprise senior or retired commercial bankers. It should ideally comprise a compact set of three bankers, of whom one would be the chairman. As this would be a full-time position, serving bank officers would need to resign, if chosen. For the process to carry credibility, it is important that the chairman and members be of high standing and should have led banks. Their choice should be made by the government in consultation with the Reserve Bank of India (RBI). As the appointments to the top management of banks will continue to require the concurrence of the appointments committee of the cabinet, it is desirable that BBB’s recommendations be generally accepted by the government. In cases where the BBB’s recommendations are not followed, BBB should be mandated to make a public disclosure of recommendations that were rejected by the government.
To stem the rot in PSBs, the government would be well advised to create this professional process for appointment of top management in the PSBs. Given the precarious position of PSBs and the substantial amount of capital that the government may have to provide in the next five years, such a step has become a sine qua non.
Krishnamurthy Subramanian teaches finance at the Indian School of Business and was a member of the P.J. Nayak Committee on governance of bank boards.

Wednesday, November 19, 2014

Important News For Bank Staff And Job Seekers

 Rising NPAs to top agenda of FinMin’s meet with bank chiefs
Bad debts at public sector banks have surged to 5.32% in one year
Bad debts of public sector banks surged to 5.32 per cent at the end of September 30 from 4.82 per cent on September 30, 2013.
Bad debts are technically called non-performing assets or NPA. Rising NPA is one of the key issues which will be discussed in a meeting of the chiefs of public sector banks and financial institutions with Finance Minister Arun Jaitley on Thursday.
Sluggish growth

According to the agenda circulated for the meeting, NPA has risen due to “sluggishness in domestic growth during the recent past, slowdown in recovery in the global economy and continuing uncertainty in the global markets.” NPAs in seven key industries, including coal and textiles, registered a surge during the period. However, iron and steel, construction, and aviation offered some respite. The amount of bad debt is indicated as a ratio to total advances.
Private banks

The gross NPA of public sector banks on September 30 rose 19.41 per cent to over ₹2.43 lakh crore year-on-year. However, the increase is lower than that recorded in the previous year when bad debts rose by a whopping 41 per cent. Meanwhile, NPAs at private sector banks have come down to 2.04 per cent from 2.06 per cent last September.
Fourteen banks are laden with over 5 per cent NPAs. United Bank of India tops with over 11 per cent NPAs followed by Indian Overseas Bank with 7.19 per cent, Punjab National Bank with 6.45 per cent, IDBI Bank with 6.32 per cent, and Central Bank of India with 6.25 per cent. There are 12 banks with NPAs ranging between 3 per cent and 5 per cent.
Vijaya Bank has 3.08 per cent, followed by Canara Bank with 3.36 per cent, Bank of India with 3.93 per cent, Syndicate Bank with 3.94 per cent and Indian Bank with 4.1 per cent. The meeting will also discuss the status of new projects that have approached banks for funds. From January 1 to September 30, public sector banks received 194 new projects and proposals (with investment of ₹250 crore and above in each project).
New projects

These projects are in sectors such as power, cement, real estate, roads, automobiles, and oil, among others. These involve total investment of over ₹4.68 lakh crore.
So far, banks have sanctioned ₹60,572 crore, while over ₹11,000 crore have been disbursed.
Finance Minister To meet Bank Chief Today 20th November  
Finance Minister Arun Jaitley will meet heads of public sector banks on Thursday to review their performance for the second quarter ended September 30.

"Issues of capital adequacy, non-performing assets (NPAs), recovery, stalled projects, new projects and financial inclusion will be discussed, among others," the finance ministry said in a statement.

Other major issues on the agenda include overall credit growth with particular reference to agriculture credit, credit to small and medium enterprises, housing loans, education loans, lending to minority communities and weaker sections of the society. Performance with regard to Pradhan Mantri Jan Dhan Yojana, Direct Benefits Transfer and Unique Identification Authority of India might also be reviewed in the meeting.

This will be the first quarterly review meeting of new Financial Services Secretary Hasmukh Adhia with the chief executive officers of public sector banks and financial institutions.

Now, take a loan and land a bank job-Hindu Business Line


If you are aspiring for a career in banking, here is a simpler route than taking the common written exam.
Take a bank loan to pursue a one-year course in banking and finance, get a job in the same bank after completion of the course, and then repay the loan from your salary. This is a new trend among public sector banks. Syndicate Bank, for instance, will first help you obtain a diploma in banking and finance before appointing you as a probationary officer.
Till now, all public sector banks, except the SBI group, have been going through the Institute of Banking Personal Selection (IBPS), which conducted common written examination to hire trainee officers and clerks; SBI has its own examination.
But now a new ‘train and hire’ method is being experimented with. “We have tied up with Manipal and NITTE universities for an entrance examination for a one-year post-graduate diploma in banking and finance. The selected candidates would have to pursue a course in IBPS. They would be appointed as Scale-I probationary officers after successful completion of the course,” M Anjaneya Prasad, Executive Bank Director, Syndicate Bank, told BusinessLine.
To begin with, Syndicate Bank expects to fill 400 vacancies through this route next year. “We will offer a loan of ₹3.5 lakh to fund the one-year course, which could be repaid in 84 months after they join as POs.” One can earn some stipend too. For the first nine months, the candidates will get ₹2,500 as stipend. They will be paid ₹10,000 during the remaining three months of the course as interns in the bank.

The advantage of the model is that banks can easily address the skill gap that exists among candidates selected through a common test. The ‘train and hire’ method will provide ready knowledge for the officers from the moment they join the bank and the hassle of training will be reduced.
Another plus is that it can deal with attrition, a serious concern for banks now. Those who complete the course and join banks as employees are expected to stick on as they deem to have genuine interest in banking and finance. Compared to those who try getting the job via the normal recruitment test, the advantages for those who prefer to do the course are: specialisation, an additional diploma, and certainty of employment.
While Bank of Baroda has also started a similar initiative, all leading private banks have standardised train and hire methods.
ICICI Bank to pay customer Rs 60,000 for raising false charges
NEW DELHI: A consumer forum here has directed ICICI Bank Ltd to pay nearly Rs 60,000 to its customer for deficiently "raising false charges again" for a fraudulent purchase made by someone else on his credit card.
 The New Delhi District Consumer Disputes Redressal Forum, presided by C K Chaturvedi, asked the bank to pay Rs 59,500 to one Rajeev Rastogi, in an exparte order.
 "The Opposite Party (bank) has chosen not to explain its statement of April 16, 2011 (monthly statement along with raising charges), and therefore we accept the unrebutted evidence and hold OP guilty of deficiency in raising the false charges again after reversing the charges earlier," the forum said.
 The forum directed the bank to issue a fresh statement by reversing charges of Rs 44,500 and award a compensation of Rs 15,000 towards harassment and legal expenses to Rastogi.
 The complaint filed by Rastogi, alleged that his credit card was manipulated by someone in January 2011 for the purchase of a laptop worth Rs 44,500, for which he had got a message on his mobile phone and, he informed the bank about it the next day.
 Though the credit was reversed and the bank issued a corrected statement, the card's monthly statement issued by the bank again showed the same debit balance of Rs 44,500, it said, adding that he had again sent a representation on legal notice, but nothing happened

Way To End Deadlock On Bipartite Settlement

What is to be done to break the deadlock in 10th BPS?
The next settlement (10th BPS) must be signed before 30th April, 2015 and it is suggested that the benefits arising out of this settlement must be as follows.
S No
Description of Benefit
Date of Effect
Hike in Basic Pay by 30% -
1st Instalment
To mitigate immediate financial burden to banks, in the form of arrears payable.
Hike in Basic Pay by additional 30% - 2nd Instalment
With this hike, cumulative hike will be 60% with reference to 01-11-2012.
Further Hike in Basic Pay by 40% - 3rd Instalment
With this hike, cumulative hike will be 100% with reference to 01-11-2012.
Dearness Allowance
AICPI 1960=100 series will continue to be adopted. Dearness Allowance will be merged at 4876 points (76.50%) with the present basic pay. For each point rise/fall in the index with reference to this base, 0.03% increase/decrease in D.A. will be made.  Thus, slab system adopted hitherto is abolished.  Moreover, changes in AICPI will be tracked on monthly basis and D.A. for a particular month will be based on the index that was 2 months ago.  For instance, D.A. for April, 2015 will be based on the AICPI (1960=100) for February, 2015.
House Rent Allowance (without any ceiling)
(a)  For places with a population of less than 1 lakh – 10%
(b) For places with a population of 1 lakh to less than 10 lakhs – 15%
(c)  For places with a population of 10 lakhs to less than 50 lakhs – 20%
(d) For places with a population of 50 lakhs and above – 30%
City Compensatory Allowance (without any ceiling)
(a)  For places with a population of 5 lakhs to less than 10 lakhs – 4%
(b) For places with a population of 10 lakhs and above – 6%
Hill Allowance (without any ceiling)
(a)  For places at an altitude of 1500 metres to less than 3000 metres – 3%
(b) For places at an altitude of 3000 metres to less than 5000 metres – 5%
(c)  For places at an altitude of 5000 metres and above – 8%
Medical Aid – To be hiked by 100%
So, no arrears will be payable in Medical Aid account for the period from 01-11-2012 to 31-03-2015.
FPP will be removed.  Similarly, in future, no stagnation increments will be given.
In lieu of FPP and stagnation increments, annual increment at 4% of the present Basic Pay will be given every year. 
In case of existing FPP, it will be converted to one full increment that is equal to the last increment drawn. But, no arrears will be payable due to this change up to 31-03-2015.
PQP will be removed.  In its place, one increment for JAIIB and 2 increments for CAIIB will be sanctioned.  Such increments will be equal to the last increment drawn.
Total number of increments for both JAIIB and CAIIB will be 3, for both award staff and officers.
However, no arrears will be payable due to this change for the period up to 31-03-2015.
S No
Description of Benefit
Date of Effect
All Special Allowances for Award Staff
Except 4 or 5 categories of posts, special allowances will be abolished for all other posts.  Posts which carry risk (e.g. Cashier, Single Window Operator and Special Assistant) and/or those which require special skills (e.g. Driver and Lift Attendant) only will carry special allowances.
Conveyance Allowance
All award staff will be paid 15 litres of petrol (provided they own a motorised vehicle), in lieu of the existing Transport Allowance. 
Officers will be governed by the existing rules for reimbursement of conveyance expenses.
Increase in Fixed Amount of Compensation on Transfers by 33%
1.  For a management transfer to a place which is at a distance up to 200 KMs from the previous place, 50% of the applicable rate will be given. 
2.  For management transfers to places beyond this distance, 100% of the applicable rate will be given.
3.  For a request transfer, no amount will be payable, if the previous transfer was also a request transfer.
4.  For a request transfer effected after 3 years from the last transfer, 100% of the applicable rate will be given, provided the last transfer was made by the management, keeping in view the administrative necessity.
5.  For a request transfer effected within 3 years but after 1 year from the last transfer, even if the last transfer was effected by the management, only 50% of the applicable rate will be given.
(a)     Increase in Halting Allowance by 20%
(b)     Increase in Halting Allowance by 30%
To pass on maximum benefits in the form of higher Basic Pay and DA this time, sacrifice is made in this regard for the time being.
Hospitalisation Expenses Reimbursement – For ‘in-patient’ treatment – Hike of 33%
No item-wise ceiling will be imposed as hitherto.  Instead, standard rates of a reputed and well equipped hospital in each metro will be taken as the benchmark rates.  Understandably, revision will be made basing on these rates,  every quarter.
Hospitalisation Expenses Reimbursement – For ‘out-patient’ treatment – Hike of 25%
This includes domiciliary treatment and outpatient treatment.
All other Allowances
30% hike over the existing rates.
All other issues like LFC, Working Hours, Holidays etc.
To be discussed threadbare and settlement to be reached.

Order of Priority must be fixed as follows:
  1. Basic Pay, DA and HRA
  2. CCA and Changes in FPP and PQP as suggested above
  3. All other allowances payable every month
  4. All other benefits and issues
Part 1 of the settlement covering Basic Pay, DA, HRA shall be reached first and is to be signed at the earliest.  Then, Part 2 of the settlement covering all other allowances and issues as above must be signed within 90 days from the date of signing the Part 1 settlement.  If for any reason delay occurs in signing Part 2 of the settlement, implementation of Part 1 settlement shall not be held up.
Date: 19-11-2014                                                                                                                      pannvalan