Tuesday, August 19, 2014

Today News 21st August

Police arrest three women for cheating bank of Rs 1.25cr-Times of India

CHENNAI: Sleuths of the Central Crime Branch (CCB) police on Tuesday arrested three women who floated a fake self help group and connived with the manager of a nationalised bank in Pallavaram to swindle 1.25 crore.

Police said J Vijaya, 32, of Thiruverkadu, M Pramila, 40, of Pozhichalur and S Nalini, 35, of Katupakkam had cheated the bank by availing government loans and subsidies for self help groups for women.

The fraud was discovered after an Indian Bank official approached police with a complaint in July 2012, stating that there had been fraudulent loan approvals in the Pallavaram branch of the bank.

Police earlier arrested the bank manager Lakshmanan who approved loans to the women in 2013. He helped investigators arrest the women.

Vijaya, who has a diploma in physiotherapy, created a fake organisation 'Rural Development Trust', Pramila, a BCom graduate, ran another fake trust 'Nancy Venezuela SHG' and Nalini, a Class 10 dropout, claimed to operate 'Annie Besant SHG'.

They collected money from the gullible donors and even issued ID cards to women in need, promising to help them get government subsidies and loans. "They used fake documents to take loans from the bank amounting to 1.25 crore," a police officer said. "Lakshmanan approved all the loans."

Police produced the women before the chief metropolitan magist
rate in Egmore on Tuesday who remanded them in judicial custody

PSU banks top appointments may be delayed; changes likely-Financial Express

Appointments of chairmen for at least ten public sector banks (PSBs) is likely to get delayed or witness major changes over the next six months following the government’s move to tighten the selection process of chairmen and managing director positions in PSU banks.

Further, top positions in two regulatory bodies — insurance regulator IRDA and pension regulator PFRDA — and the chairman post in UTI Mutual Fund have been lying vacant for quite some time.
As many as 4 PSU banks are already functioning without a chairman and an MD. “The next batch of appointments is likely to be done only after the government finalises the new norms for appointment of bank chairman. The government is now expected to split the role of chairman and MD posts as recommended by several committees and former RBI governors. The process followed by the UPA government in its last months in office is unlikely to be followed,” said a top-level source. There is yet to be clarity on who will be the chairman, whether it should be a serving or a retired banker or a non banker, he said.

While Indian Overseas Bank chairman M Narendra retired last month, Bank of Baroda CMD SS Mundra has shifted to the RBI as Deputy Governor. United Bank of India has been without a chairman for some months now after the exit of Archana Bhargava as CMD. The government is likely to bring a new chairman and MD for Syndicate Bank with its CMD SK Jain behind the bars for alleged bribery charges. Canara Bank CMD RK Dubey and Oriental Bank of Commerce CMD SL Bansal are retiring within two months.

The CMDs of Union Bank of India, Vijaya Bank, Punjab and Sind Bank and Allahabad Bank are set to retire within the next six months — over the November-January period.
A panel, led by RBI Governor Raghuram Rajan, interviewed 19 executive directors of PSBs in October last year for six chairmen’s positions that will fall vacant between August 2014 and March 2015.

“There’s apprehension that same ‘unfair practices’ might have played a role in the selection of CMDs during the previous regime,” an official source said.
Among regulatory bodies, the government is yet to fill up the post of member (Life) in IRDA. Similarly, it has not yet appointed a chairman for pension regulator PFRDA after the exit of Yogesh Agarwal last November. RV Verma, Member, is officiating as chairman. In UTI MF, there has been no chairman for over three years now. The Department of Personnel and Training (DoPT) had recently asked the finance ministry to follow the principle of seniority while filling up the vacant post of MD in LIC.

The directive from the DoPT came after some senior officials of the corporation who have put in more than 32 years of service and have residual services of three years or more had represented to it about how the finance ministry is excluding their names from the selection process meant to appoint the fourth managing director of the corporation.

The Clean-Up Has To Begin From The Top It is those who have the power to decide and interpret the rules who are up for sale, making corruption an institution -Business World

The Central Bureau of Investigation (CBI), in two big swoops in recent days, has arrested a slew of public sector executives and corporate honchos for taking and giving bribes. The first was the case of now-suspended chairman and MD of Syndicate Bank Sudhir Kumar Jain who was arrested for receiving Rs 50 lakh in exchange for hiking the credit limit of some companies. Principal among the bribe givers, according to the CBI, is Bhushan Steel’s vice chairman Neeraj Singhal and three other officials, who also have been arrested.

Close on the heels of the Syndicate Bank bust, the CBI has arrested Rakesh Kumar, CEO of the Censor Board for demanding a Rs 70,000 bribe for clearing a regional movie. The lid came off the scam when 2 middle-men were arrested last Thursday who confessed to regularly being on the take on behalf of Kumar from film producers for the timely release of censor certificates.


These cases illustrate how far the rot of corruption has eaten into the country’s vitals. It is amongst the foremost reasons the Congress-led UPA lost the Lok Sabha elections; and at the top of Prime Minister Narendra Modi’s declared agenda of governance is to weed out corruption. While the cancer has spread to the ordinary policeman at the traffic junction and the municipal clerk who issues death certificates, these recent arrests remind us that the rot begins from the top. It is those who have the power to decide and interpret the rules who are up for sale; and there are thousands of corporate heads and individual businessmen who are ready to pay for an early or a favourable decision. Together, the bribe taker and the bribe giver at the top have made corruption an institutional system.

Even the judiciary has not been spared. The malaise is so bad that the Special CBI judge Sawarna Kanta Sharma, when hearing S K Jain’s bail application in the Syndicate Bank case, warned the counsel for the accused to stop attempts at influencing her for a favourable order. In these circumstances, there is no point for those in government to address their platitudes to the public in general.

The masses are the worst victims of institutionalised corruption and have to compensate those who have oiled the palms of the high and mighty. It is better if the zest to root out corruption is directed at the top. The CBI too admitted that the arrest of a senior person like the Syndicate Bank CMD is rare and has come after many years. It is time there is speed and seriousness in cleaning the Augean Stables from the top down of both bribe takers and bribe givers. -

Pawan Bansal, jailed in Syndicate scam, owns six firms -DNA
Pawan Bansal, the mastermind of the Syndicate Bank bribe-for-loan scandal, had established a network of companies over the years for his illegal operations. Bansal is director of six companies, including Altius Finserv Private Limited, that is currently under the scanner.

Bansal had allegedly brokered deals with Syndicate Bank chairman and managing director SK Jain to get loans for some corporate houses. CBI had also analysed some of the phone intercepts that established that the duo were striking a deal. Both Bansal and Jain were arrested by CBI, along with nine other accused, in the case. All of them are currently in judicial custody.

"We are aware of Bansal's connections with other companies. We will investigate all aspects and take action if any wrongdoing has taken place," CBI chief Ranjit Sinha told dna.

Bansal, a known fixer in Delhi's swish circles, organised loans for corporates and is a chartered accountant. He is managing director of Altius Global Finance Private Limited and director of BT Divine Power and Mining Corporation Limited. Earlier, he also served as director of Altius Properties Private Limited, managing director of Capri Global Capital Limited and Capri Global Investment Advisors Private Limited. Most of the companies are involved in credit solutions, debt capital market and investment banking.

However, through BT Divine Power and Mining, incorporated in 2011 with authorised share capital of Rs100 crore, it seems Bansal has attempted to diversify and venture into power and mining sector.

One of the current directors of Altius Finserv Private Limited, Raj Kumar Jain, also holds nominee directorship of Delhi's exclusive upmarket malls DLF Emporio and DLF Promenade, along with nine other companies.

The probe is only going to get bigger as the CBI peels the layers off the intricate nexus of the clientele of Bansal's companies and money transactions that have taken place in last few years.

According to the ministry records, Altius Finserv Private Limited has an authorised capital of Rs20 crore, while its paid up capital is around Rs13 crore. Altius Finserv Private Limited was earlier functioning as Upvan Securities Private Limited.

Bansal allegedly uses Altius Finserv as a front to collect money from various companies he helps and then passes on the money to bank officials.

In the two FIRs, registered in the Syndicate Bank case, CBI has named Bhushan Steel Ltd vice-chairman Neeraj Singal, chief financial officer of Bhushan Steel Ltd Arun Agarwal, Ved Prakash Agarwal, chairman-cum-MD of Prakash Industries, Pawan Bansal, chartered accountant, Vineet and Puneet Godha (relatives of Jain), Vijay Pahuja, Totlani and Pankaj Bansal. They have been booked under various provisions of the Prevention of Corruption Act and criminal conspiracy under the IPC.

Syndicate Bank case: Court to decide on bail pleas -Hindu Business Line
CBI Director seeks details of corporates routing money abroad-Rediff

Central Bureau of Investigation Director Ranjit Sinha has written to Finance Ministry seeking details of all the cases from the Directorate of Revenue Intelligence in which corporates have allegedly over invoiced their imports thereby causing losses to banks which extended loans to them.

Sinha has written to Secretaries of Banking and Revenue Department in the Finance Ministry, saying this model of over invoicing by a front company of a business group abroad is being largely misused by corporate groups to illegally route funds from abroad, official sources said.

The modus operandi highlighted by CBI says that while the corporate strikes a deal for imports with a company in one country, the billing is done at inflated prices in other country by the front company of the corporate group, they said.

This helps the group to take loan from banks against the inflated bill while the actual price paid to the exporter firm is much less.

The difference is pocketed by the corporate group which also manages to save on duties as such imports in some infrastructure related sectors do not have any import duties, the sources said.

In his letter, Sinha said many corporate are indulging in such third party transfers in which their front companies are located in tax haven countries in violation of the Reserve Bank of India guidelines.

In the letter to Revenue Secretary SK Das, Sinha has said the cases under Directorate of Revenue Intelligence related to such third party transfers.

The CBI Director did not name any particular case or a corporate house.

Sinha has requested Das to provide all information available with DRI and customs on cases in which practice of routing money using tax havens or front companies has been detected, the sources said.

The agency has recently filed a preliminary enquiry on the basis of a reference from Directorate of Revenue Intelligence alleging that a company purchased power sector equipment from South Korea and China as power sector imports attract very less duty.

These inflated invoices were allegedly submitted to the banks to avail credit facilities of equivalent amount.

The sources said since public sector banks were allegedly duped by over invoicing, the case was referred by Directorate of Revenue Intelligence on the basis of which a preliminary enquiry was registered by the agency last month.


Syndicate Bank bribery case: Mix-up in details of key accused-ET
Agarwal, named as chief financial officer of BSL in the first information report
filed on August 1, was arrested on August 4. The FIR says Agarwal, along with
BSL vicechairman Neeraj Singhal, had met Syndicate Bank Chairman and Managing
Director SK Jain in his office to enhance the credit limit of the company and
agreed to pay him money in return. According to the FIR, Rs 10 lakh was
transferred to an intermediary of Jain by Agarwal on June 20. But Agarwal isn't
the CFO of BSL, but o ..

Can govt banks ride the momentum for change?-Business Standard

Bogged down by inefficient boards, public sector banks have got mired in mounting bad loans and rising corruption. The arrest of the Syndicate Bank chief has created an opportunity to stem the rot, but can they seize it
On July 22, Sudhir Kumar Jain - the now suspended chairman and managing director of Syndicate Bank - addressed a group of businessmen and industrialists in Kolkata, highlighting the role played by banks in promoting economic and industrial growth in the country. Eleven days later, he was in the custody of the Central Bureau of Investigation.

Jain, 54, a career banker and chartered accountant, was charged with accepting a bribe of Rs 50 lakh from Bhushan Steel for granting credit extension to the company despite it having defaulted on repayment of loans amounting to crores of rupees. Jain was also accused of negotiating with other private companies, including Prakash Industries, for similar illegal gratifications.
Legal action/proceedings against some top PSU executives
    Former chairman & managing director, Indian Bank
    CASE: Sanctioning large loans, flouting norms, causing loss to the bank in early 1990s. Convicted
    Chairman & managing director, UCO Bank
    CASE: Involvement in securities scam masterminded by Harshad Mehta in 1992. Convicted
    Managing director,  State Bank of India
    CASE: Involvement in securities scam masterminded by Harshad Mehta in 1992. Convicted
    Chairman & managing director, Syndicate Bank
    CASE: Allegedly took bribes for sanctioning loans to companies. Arrested in August 2014

On the heels of the Syndicate Bank case, IBDI Bank, another public sector bank, was cited by CBI for investigation with regard to its loan of Rs 950 crore to Kingfisher Airlines in 2008-09. And though IDBI Bank Chairman and Managing Director MS Raghavan claimed that it was not the bank but Kingfisher Airlines that was being probed, its stock fell 5 per cent following the news. Raghavan has also admitted IDBI Bank is among the many banks with exposure to the embattled Bhushan Steel.

Incidents like these seem to confirm the long-held belief among many that there is a rot in the top echelons of public sector banks, and that the banks' feeble control systems offer scope for recurrence of similar malpractices. "It is unfortunate that public sector banks suffer from a culture of leniency and tolerance," says Dhananjay Sinha, head of institutional research at Emkay Global Financial Services. "Generally, the processes are weak and bad loans often get accommodated in the books. Individuals are tempted to exploit this situation to their benefit."

The arrest of Jain - the first time ever that the chief of a state-run bank has been taken into custody while in office - has raised, according to Raghuram Rajan, governor of the Reserve Bank of India (RBI), "troubling issues". But these are not new issues. However, what the Jain episode will do is to create a momentum for change in the functioning of government-owned banks, which are currently grappling with declining profitability, mounting bad loans and inadequate capital

For one, there are reports that the finance ministry has put off the appointments of at least 10 CMDs of public sector banks until the new norms are notified. The finance ministry is not only keen to split the roles of CMD, but also wants to appoint them for a fixed tenure of five years. Apart from banking experts and former RBI governors who have advocated such a move, a committee constituted by the central bank to review governance of banks had also endorsed this administrative restructuring. In a report submitted in May, the committee chaired by PJ Nayak, former chairman and chief executive officer of Axis Bank, said, "It would be desirable for the two positions to be separated. Until then there is a very real possibility of the several chairmen positions across banks being filled on the basis of political allegiance rather than professional skills. This could imperil banks."
Their guidance is critical for making loan applications, their backing is essential for loan approvals. They are middlemen — the link between banks and borrowers. The role of these financial intermediaries is now under scrutiny following the arrest of Syndicate Bank’s (now suspended) chairman and managing director, Sudhir Kumar Jain. It is alleged that Jain had been engaged in negotiations for illegal gratification directly as well as through middlemen for extending favours to private companies.

Many believe that this is a stray incident. “There are some good middlemen and some not-so-good. A good middleman acts as a broker. But if the point of a middleman is to pay bribes, that is obviously not okay,” Raghuram Rajan, governor of the Reserve Bank of India (RBI), told reporters earlier this month.

A former executive director of a public sector bank explains that intermediaries often help banks in taking informed credit decision. "For small borrowers, it is sometimes difficult to assess the credit risk. Middlemen provide information that helps banks in evaluating loan proposals,” he says. Bankers say these middlemen are typically financial experts like chartered accountants and former bank executives. In most cases, they not only share a good rapport with the chairman, but also with junior executives. This relationship often helps them influence loan sanctions.

A key link
The role of the CMD cannot be underestimated in the banking system since he is the key person in the approval of large loans. After the credit approval procedure underwent a change in 2009, loan proposals pertaining to retail and small advances are handled by the branch managers, while big-ticket borrowings are sanctioned at the regional or zonal level or in head offices. Typically, large advances are approved by a credit appraisal committee, which comprises the CMD, executive directors and general managers.

While banks have moved away from the system where the chairman unilaterally approves a loan proposal, in practice executive directors or general managers rarely question the CMD's decisions in the credit appraisal committee meetings. "It is partly because the boards of most public sector banks are not empowered. Employees also fear that resisting the chairman's decision may compromise their promotion and impede career progression," says a banking analyst with a global consultancy firm.

Many, including the Nayak Committee, are critical of the way the boards of public sector banks are constituted. The Nayak panel noted, "Unlike in private sector banks, the boards (of public sector banks) have no governance role or control over bringing in directors with special skills. Average tenures of chairmen and executive directors are short, all of which leads to the weak empowerment of boards."

Under the company law, existing board directors of blue-chip companies work with the CEO through the nomination committee to locate and persuade suitable new directors to join them. But in state-run banks, all non-official directors are appointed without consultations with the chairman. Moreover, all directors, other than those elected by shareholders, are appointed by the government. Hence, many boards comprise politicians and entrepreneurs with close links to political parties.

Ashvin Parekh, managing partner of Ashvin Parekh Advisory Services LLP, says that after the financial crisis of 2008-09, the banking system across the globe accepted the need to strengthen the quality of bank boards. "In India, due to structural constraints, we have not been able to pay much attention to this issue," he says. "There is a need to increase the average tenure of chairmen and executive directors, revisit the selection process and improve the compensation structure. I have known many bank chairmen for the last two decades, and I find those who were really honest are the ones who are struggling to buy a house in a metro city after retirement."

A muddled system
Currently, the appointment of chairmen and executive directors in public sector banks is carried out by a selection committee constituted by the government, chaired by the RBI governor. The committee also includes the RBI deputy governor for banking and secretary for financial services in the finance ministry. In practice, the governor does not attend the selection process. The short listing of candidates is undertaken by the department of financial services, with RBI normally unaware of the way the exercise is conducted.

Another drawback is the lack of uniformity in the board design of public sector banks. For instance, the SBI Act of 1955 refers to seven director categories, while IDBI Bank, constituted under the Companies Act, has five director categories.

The move to give the top officials a longer tenure also has the support of the Nayak Committee. "At present, bankers get appointed to top management positions a little too late in their careers for them to have adequately long tenures. These top management positions are contractual, and end at the age of 60 or after two years, whichever is later. While some officers do get longer tenures, most do not," the panel said, while suggesting that chairmen of state banks should have a minimum tenure of five year and executive directors, at least three years.

The Nayak Committee report is replete with examples of the skewed priorities of bank boards. In one bank, the panel found that the taxi fare reimbursement policy got the same coverage in board discussions as the bad loan recovery policy. Another bank deliberated on the purchase of office premises in Bhopal and provision of leased residential accommodation to officers in six locations at its board meeting. Other non-strategic issues discussed at board meetings included the details of a lecture by a bank's chairman at a college, extensive coverage of the finance minister's visit to the bank and probable disciplinary action against manager-level employees.

Indicting the government-run banks for the "general absence of calibrated discussion in boards", the Nayak panel cautions that this could have dire implications for credit loan growth in these institutions. Now it is up to the government to consider the flaws in the set-up of public sector banks and respond to the challenges quickly.

Banks ask Bhushan to sell & lease back critical assets-Business Standard

SBI Caps readies plan, identifies 4 assets; bankers say there are enough bidders
A day after effectively taking charge of Bhushan Steel, lenders have delivered another punch. The bankers’ consortium, which met in New Delhi on Monday, has asked the troubled steel maker to sell and lease back some of its critical assets to reduce debt, as the borrower is finding it difficult to raise equity from the market.

This is part of the road map drawn by SBI Caps, the merchant banking arm of State Bank of India (SBI), for recovery of around Rs 40,000 crore that Bhushan Steel has borrowed from 35 lenders.

According to the plan, the steel company has been asked to deleverage by repaying debt. However, given the company’s present problems that led to a slide in its share price, raising equity through a qualified institutional placement was not a viable proposition at this point, a banker who attended Monday’s meeting told Business Standard.
CBI arrests Syndicate Bank’s chief, S K Jain, over graft charges
CBI arrests Bhushan Steel Vice-Chairman & Managing Director Neeraj Singal for allegedly bribing Jain
SBI Chairman Arundhati Bhattacharya says an external agency will be appointed to monitor day-to-day operations of Bhushan Steel.
Lenders decide to go for forensic audit; say they will nominate three members on the company’s board

The share price of Bhushan Steel has fallen 62 per cent since August 5. The shares closed at Rs 144.90 apiece on Tuesday.

Bankers said four assets, including a coke oven plant, had been identified by the steel company. It is not immediately known how much debt will be reduced through the sale and lease-back.

According to bankers, there is no dearth of buyers for the company’s facilities and SBI Caps is in the process of identifying prospective bidders, which might include global steel producers.

Banks have tightened their grip on the firm since its vice-chairman & managing director, Neeraj Singal, was arrested by the Central Bureau of Investigation on August 7 for allegedly bribing SK Jain, the now-suspended chairman & managing director of Syndicate Bank.

Bankers said the forensic audit, as decided by the consortium on Monday, would be done by an external agency and would seek to find out if the firm diverted the borrowed funds or used those for purposes other than those for which the loans were given.

It would also find out whether there was creation of genuine assets.

These steps were taken even as the loans continue to be standard on the books of banks and have not become non-performing. However, following the liquidity problem that Bhushan Steel, one of the most indebted steel makers of the country, is facing, the loan is now categorised as special mention account 2 that is overdue in 60 days.

A concurrent auditor will also be appointed to monitor cash flows on a daily basis and an independent engineer will look at the operations of the company.

“Given the magnitude of the exposure and the number of lenders involved, banks will take a huge hit if the loan turns bad,” said a senior executive of a public-sector bank.

Monday, August 18, 2014

Game Changer financial Inclusion

‘Financial inclusion is a big game-changer for banks

It means more deposits, micro-financing, cash flows and revenues for banks, says Union Bank of India CMD

The 95-year-old Mumbai-headquartered Union Bank of India, which has around 3,900 branches across the country, has deployed technology extensively in banking services. Recently, the state-owned bank launched ‘tabulous banking,’ a tablet-based account-opening process, which the bank’s Chairman and Managing Director Arun Tiwari, in an interview with BusinessLine, termed a huge success.

Tiwari, 57, who took up the reins in December last, says the FINANCIAL inclusion policy is a big opportunity for public sector banks as it will help them go deep into the countryside and improve their bottomline. Tiwari is positive about the economy which he said would pick up “during Q3 and Q4 this financial year.”

After the United Bank of India ‘NPA fiasco’, public sector banks are once again in poor light with the arrest of Syndicate Bank Chairman SK Jain by the CBI in the bribe-for-loan scam. Your comments.

I don’t want to comment on this because the CBI has only got technical evidence of corruption. But, as for non-performing assets (NPAs), complex issues are involved. Many of these issues are beyond banks’ control.

Look at infrastructure — don’t you think we need a lot of roads, ports, power stations and other infrastructures? But a lot of such projects for which banks have given big-ticket loans are stalled because of the long delay in clearance.

There are around ₹3-lakh crore locked in these projects.

The majority of the projects are in the power sector. How will the companies repay the loans when the projects are stalled? And the economy has not been doing well, too.

Your bank too has a high volume of NPAs — over ₹10,000 crore — and the gross NPA ratio is more than 4 per cent (and just 20 borrowers account for an NPA of ₹3,350 crore). Your take on this.

We are narrowing the ratio. In the next couple of quarters, I hope there is going to be a shrinking of the NPA volume. Most of the large loans are well secured, and the big-ticket borrowers have huge assets on the ground. So, we are not very worried.

What is the basis for your optimism?

The economy is going to do well during Q3 and Q4 of this FINANCIAL year. It has already started looking up.

The stalled infrastructure projects, I hope, will soon get clearances and get moving. Fortunately, we now have decisive governance. The Finance Minister has given focused, precise instructions to bank heads. We have been given a clear roadmap. I’m sure, by Q3-Q4 the banking sector will be back on track. Recovery is faster. There are some green-shoots already.

Another important aspect is the FINANCIAL inclusion (FI) policy. FI is a big game-changer for the banking sector. It is opening up a lot of opportunities for the sector.

Commercial banking will go to the distant villages — this will mean more deposits, more micro-financing, more cash flows and more revenues for the banks. This will give a boost to the economy.

We have already covered over 33,000 villages out of our target of 34,000 under FI.

In view of the NPAs, are you going slow on big infrastructure loans?

We do give infrastructure loans. But now we focus on retail, agriculture and MSME (micro, small and medium enterprises) lending.

This is our ‘RAM’ lending strategy. Delinquency is lower in smaller loans, returns are higher and competition is lesser. About 45 per cent of our total loans is for this sector.

And, 68 per cent of our incremental loan in the first quarter of this FINANCIAL was to MSMEs. The FMCG (fast-moving consumer goods) MARKET is growing fast, fuelling the need for more small loans.

Union Bank is big on technology. Your comments.

We have the best IT platform in the industry. Nearly 67 per cent of our transactions are e-transactions.

All our branches and ATMs are linked to core banking.

We are the first public sector bank to have launched ‘tabulous banking,’ a tablet-based savings bank account opening process, whereby the bank goes to the customer’s doorstep to offer services.

It’s a huge success. And, while many other banks’ ATMs are running at a loss, ours are not. We are big on technology and are going to expand our IT platform.

What about plans for going in for qualified institutional placement?

We are not in a hurry as we don’t need the money immediately. We are waiting for the right MARKET conditions. We have the permission to raise ₹1,386 crore through the QIP route.

You don’t seem bullish about branch expansion.

Well, we are not very aggressive. But, in the last financial year, we opened 340 branches. We already have 3,900 branches and we have a very good geographical spread across the country.

What are your priorities for the next three years?

Before I step down in three years, I want to raise the bank’s ROA (returns on assets) to 1.25; ROE (returns on equity) to 19-20; and NIM (net interest margin) to three plus. I want the loan portfolio to grow, too.

Union Bank is viewed as a conservative bank…

We are not conservative, we are prudent!

Bipartite Settlement By Correspondence

UFBU leaders met Union Finance Minister, Mr Arun Jaitley on 27/06/2014, i.e. about 50 days ago. At the end of the photo session with FM, the union leaders were told that R S Sandhu (Financial Services Secretary) would look into the matter and verbal assured that the settlement process will be expedited.

The 27th June meeting was extremely successful from the point of UFBU leaders as (a) they got a chance to be photographed with new FM, which can adore their offices and homes; (b) they got another alibi to not follow up with IBA at least for few weeks. They issued circular and told their cadre that FM has himself intervened and has given instructions to Mr Sandhu to do the needful. In my childhood I have read number of stories wherein professional cheats (like Natwarlal ) were able to successfully hoodwink gullible people again and again. All those made interesting reading in those childhood days. But now this ripe age, mass scale hoodwinking of almost 10 lakh bankers, does not bring any smile on my face. It only brings agony as to the helplessness of the Aam Banker. This is one of the reasons that I do not feel like writing articles on wage revision without any noticeable progress.

To consolidate the matters, let me publish here about the developments in last 10 days or so. We have seen exchange of few letters between IBA and UFBU / other leaders. The contents of these letters are so listless that one can not really make out where we are heading.

Let me re-produce the correspondence recently accessed by us but I leave it to our readers as to infer whatever they deem fit :-

Annexure I : Letter dated 5th August, 2014 from UFBU to IBA
The Chief Executive,
Indian Banks’ Association,
World Trade Centre Complex,
Centre 1, 6th Floor, Cuffe Parade,
MUMBAI 400005
Dear Sir,
Please refer to our Letter No. UFBU/IBA/2014/65 dated 16th July 2014 on the captioned subject, expressing our concern for not holding any meeting after 13th June 2014 so as to continue the negotiations. We are yet to receive your response in the matter.
We were given to understand that the issue was supposed to have been discussed in the recently held Managing Committee Meeting of IBA. In this connection, we have to inform that the growing unrest among the employees and the undue delay in conducting the negotiations at regular intervals have become matters of serious concern. We shall, therefore, be glad to have your immediate response in this regard.
The uncertainty and lackadaisical attitude cannot be allowed to continue for eternity. It is desirable to take forward the negotiations in the interests of everyone to create a better atmosphere and avoid unpleasantness. We await your immediate response without any further delay.
Please treat the matter as EXTREMELY URGENT.
Please acknowledge receipt of this communications and advise us the position.
With best regards,
Yours sincerely,

Annexure II : Letter dated 8th August, 2014 from IBA to UFBU (In response to UFBU letter dated 5th August 2014)

Annexure III : Letter dated 9th August, 2014, from UBFU to IBA (In response to IBA letter dated 8th August 2014)

Thus, even after 40 days of meeting with FM (which UFBU leaders felt to be break through and flashed their photographs through social media), there was no response from government and UFBU had to send reminder to IBA to get a response for next Negotiation Meeting. Post that, a bombshell came, as IBA showed no hurry for a meeting, but responded curtly and asked UFBU to bring down their demands if they wish a meeting to be called.

The only positive point here is that these three letters got exchanged within a span of four days. Letter dated 8th August of IBA got delivered by early 9th August 2014 (I am not sure which mode was used by IBA for super delivery), and UFBU leaders held consultations within few hours (Again I am not sure whether it was through tele-conference or skypy or other internet mode) and ensured that letter is drafted, signed and sent to IBA within few hours of its delivery (that is on 9th August). All credit to UFBU for super speed as on earlier occasions we have seen they hold a meeting which takes at least 10 to 15 days, and then after consultations they agree to take next step.

Thus, now IBA has given an idea for negotiation through letters and not through meetings. Now, it seems IBA wants that UFBU should give in writing that UFBU is agreeable to slash their demand from 25% rise to say 18% to 20%. Then IBA will write back that it is still not acceptable and they can go maximum upto 12%. Again a stalemate and then again IBA will write letter to UFBU to slash demands which UFBU may agree to reduce to say 15%. Then IBA may agree to increase their offer to say 13.5% and UFBU jump to grab the same.
Thus, we can now say that UFBU may be told that there is no need for meetings from this BPS itself and they can negotiate it through correspondence. Exchange of 9 letters within two weeks can conclude the negotiations. Union Subscription can be reduced from Rs 100 to Rs10 pm. No need for levy.

Great Idea, Sirji!! No Ullu Banawing

Saturday, August 16, 2014

Ream Main News Of Today

Charging for higher ATM use will lead to more branch visits

Till now, banks were only allowed to charge customers if they transacted at non-home bank ATMs more than five times a month. That is now being reduced to three
The decision to allow banks to charge their customers for frequently using ATMs of the home-bank might prompt customers to visit bank branches more often, which in turn will increase the cost for lenders.

This is because no charges or limit have been prescribed for transactions at branches.

The Reserve Bank of India (RBI) on Thursday permitted banks to charge customers for using home-bank ATMs more than five transactions a month. Till now, banks were only allowed to charge customers if they transacted in non-home bank ATMs more than five times in a month. That cap has also been reduced to three in the six metro centres of Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad. Non-home bank ATMs refer to ATMs of banks where the customer does not have an account.

The move, however, has made lenders hopeful of recovering a significant part of the running and maintenance cost of these machines. Bankers also expect the volume of non-financial transactions to drop sharply once charges are introduced. These transactions do not earn any revenues for banks.

"For banks, ATMs were supposed to save costs. Customers were encouraged to go to an ATM to withdraw money instead of visiting bank branches. But in the past few years, the volume of non-financial transactions has increased substantially. Banks do not earn any revenues from these transactions. Also, the ticket size of financial transactions has reduced significantly, making the entire process expensive for banks. Unless there is a control, banks are losing a whole lot of money. Hence, introduction of these charges was necessary," said a senior executive in charge of a private sector bank's retail lending and payments business.

The transactions cover both financial and non-financial dealings. Hence, services such as balance enquiry, change of PIN, mini statement and others will also be chargeable. However, the rate of charges has been retained at Rs 20 a transaction. This will come into effect from November 1. Banks have been advised to communicate the charge structure according to their board-approved policy to customers in a fair and transparent manner.

"This will not lead to substantial earnings for banks but will help us recover our cost. Banks have been incurring costs in tightening the security arrangements following the attack inside an ATM in Bangalore. I don't think customers will mind paying a fee because it is ultimately for their safety," A Surendran, head of retail and international banking business at Federal Bank, told Business Standard.

Sector analysts, however, feel the decision might encourage customers to frequently visit bank branches instead of going to ATMs. It is estimated that on an average, banks incur a cost of Rs 10 for every transaction in an ATM. But in branches, the per-transaction cost for banks is close to Rs 50. "In such a scenario, banks will suffer as their cost of operations will increase further," said a banking analyst.
has left it to banks to decide on the maximum number of free ATM transactions. Most bankers did not confirm if they will start charging their customers for using home-bank ATMs for more than five times a month.

"Overall, the move is good for the banking industry as it will help reduce the number of needless transactions. Also, I believe eight free transactions in a month (considering use of both home and non-home bank ATMs) is adequate. But it is too early to say if we will introduce these charges. We have a committee, which will take a decision," said Rakesh Sethi, chairman and managing director of Allahabad Bank.

A few banks may also introduce the charges selectively based on the relationship value of their customers. "Most likely, we will tweak our strategy on ATM usage. But probably, we will not charge our priority and premier customers," said a banker with a private lender that currently does not charge its customers even for using non-home bank ATMs. The bank may also waive the charge if a customer maintains a certain balance above the mandated minimum average balance in his savings account.

Syndicate Bank CMD remanded in judicial custody till Aug 29-Times of India

NEW DELHI: A special CBI judge on Saturday warned of action against the accused in Syndicate Bank bribery case if they do not stop attempts to influence her as she remanded the bank's suspended CMD Sudhir Kumar Jain and others to judicial custody till August 29.

"Please tell your clients to stop sending love letters to me. I am already from a well off background, If you don't stop this act, I will direct CBI to take action against you," Special CBI Judge Swarana Kanta Sharma said during the hearing.

She pulled up the accused and asked their counsel to make them behave properly. 

Bhushan Steel Ltd vice-chairman Neeraj Singal, chief financial officer of Bhushan Steel Ltd Arun Agarwal, Vineet Godha, Puneet Godha and Vijay Pahuja were the other accused who were sent to judicial custody.

Jain, who was suspended as chairman and managing director after his arrest early this month, and Singal were produced in court after expiry of their judicial custody while the other accused were brought from jail on court's production warrants.

The court, on August 12, had issued production warrants against them.

CBI has filed two cases against Jain — accusing him of receiving a bribe of Rs 50 lakh through conduits and abusing his official position to enhance the credit limits of some companies in violation of laid-down procedures.

Singal was arrested by CBI on August 7, hours after the court had issued a non-bailable warrant (NBW) against him and an alleged middleman, Purushotam Totlani in the case.

On August 2, CBI had arrested six accused, including Jain and Agarwal.

CBI claimed to have recovered Rs 21 lakh in cash from Jain's residence besides gold worth Rs 1.68 crore and documents of fixed deposits of up to Rs 63 lakh.

In the two FIRs, CBI has named Singal, Ved Prakash Agarwal, chairman-cum-managing director of Prakash Industries, Pawan Bansal, chartered accountant, Vineet and Puneet Godha (relatives of Jain), Vijay Pahuja, Totlani and Pankaj Bansal.

They have been booked under various provisions of the Prevention of Corruption Act and criminal conspiracy under the IPC.


PSU bank staff must be given more support and motivation: Former RBI Dy Governor

Kochi, Aug 16:  
Former Reserve Bank Deputy Governor V. Leeladhar has said that India’s public sector banking sector has the best talents but the system needs to give them more support and motivation.
Leeladhar, who was honoured yesterday with a lifetime achievement award of the State Bankers’ Club for his commitment to banking, noted: “We have the best of the people in public sector banks, but we need to give a little more motivation to them.”
Subprime crisis
He recalled that that the RBI succeeded in insulating Indian banking system from the subprime crisis that devastated US financial institutions five years ago by directing the banks well in advance to increase the risk rate of home loans.
RBI Regional Director Nirmal Chand, who felicitated Leeladhar, pointed out that along with the then RBI Governor Y.V. Reddy, Leeladhar had played a pivotal role in insulating Indian banks from the global financial crisis.
Kerala Finance Minister K.M. Mani, who presented the award to Leeladhar, said that comprehensive financial inclusion could be achieved through a joint effort of the government and the banks.
SBI chief: Jan Dhan scheme will bring down use of cash-Hindu Business Line
Mumbai, Aug 15:  
Rapid financial inclusion envisaged by the Government under the ‘Jan Dhan Yojana’ will lead to a decline in the usage of cash in India in line with developed countries, according to State Bank of India Chairman Arundhati Bhattacharya.
Referring to the magnitude of the challenge under financial inclusion, whereby only 58.7 per cent of households in India avail of banking services, the SBI chief said against this background, the launch of the Jan Dhan scheme by the Government is a welcome step.
In his Independence Day speech Prime Minister Narendra Modi announced a major new scheme — Jan Dhan Yojana — to universalise banking access and financial inclusion.
This scheme will provide for a bank account, a debit card and an insurance amount of Rs. 1 lakh to poor families.
Bhattacharya, in a statement, said with such rapid financial inclusion, the use of cash in India will decline in line with developed countries such as the UK (2 per cent), Australia (3 per cent), and Japan (6 per cent) going forward.
According to an RBI empirical study, alternative payment channels such as cheques, credit/ debit cards and Internet banking are not only more efficient than paper currency, but also leave paper/ electronic trails, facilitating tax audit. Usually, such payment mechanisms act as partial substitutes for high-value currency.
The SBI chief said the positive spillover from this structural transformation (via financial inclusion) in the long-run would be enormous. This apart, the move towards digital India would make good use of cost-effective cellular technology in future banking growth.
Further, the launch of the Sansad Adarsh Gram Yojana will encourage the development of smart villages that can effectively co-exist with smart cities as underlined in the Budget, she added 
CBI raids 56 places in Odisha-Statesman

Director of chit fund company held

 BHUBAneswar, 16 Aug: The CBI today carried out raids at 56 locations, including the residences of BJD legislator Prabhat Tripathy, Odisha Cricket Association secretary Ashirvad Behera, and several others in connection with a multi crore chit fund scam.
The agency also arrested Mr Sambit Khuntia, a local youth Congress leader and director of the Artha Tatwa group, which has duped thousands of depositors.

 A few weeks ago the CBI had raided the residence of BJD MP Ramachandra Hansda, former BJD MLA Subarna Nayak and former BJP MLA Hitesh Bargati.
The raids sent jitters down the ruling BJD circuit here as it blows the lid off the links between politicians, builders, media houses and chit fund company owners.
Chief Minister Naveen Patnaik had stonewalled vociferous demands for a CBI probe over the last two years. He persistent argument had been that the state police was competent enough to carry out the investigations.

 The state police had , however, never bothered to even question any political leader. The brazen manner in which the police acted had raised eyebrows last year when AT Group head Pradip Sethy told reporters about his political links when he had been arrested last year. Yet the police did not go after the politicians.

 With the CBI conducting raids on a few politicians, the cover has been blown apart, remarked Opposition political circles here.
Reliable sources said a minister belonging to the ‘youth brigade’ and a BJD legislator, both from coastal Odisha are also on the radar of the CBI and ED.

 BJD legislator Prabhat Tripathy said he was not at home when the search was conducted at his residence in Cuttack and Banki. "I have no links whatsoever with AT Group," he asserted.

 OCA secretary Ashirvad Behera confirmed the raids but said he had nothing to hide as the AT Group had provided Rs 1 crore towards sponsorship of the Ranji Trophy Team. The payment was made by cheque and that is the only link, said Behera. The CBI wanted to know the date of the cheque, the bank in which it was deposited, said Mr Behera.
A Odia newspaper's office and its owner’s residence was also raided today. The CBI also searched the residences of Manoj Das, mine owner, Satyabrata Dhir, Prasanna Sethy, brother of Pradip Sethy, the owner of AT Group, a Charted Accountant’s office and several other places.

 Mr Sambit Khuntia is said to have been arrested after a CBI team found him holed up inside a well at his residence in Bhubaneswar. When the team reached his residence this morning, his wife and mother claimed that he was not at home. However, the sleuths found him hiding in the well in the backyard of his house.

 It may be recalled that the CBI was entrusted with the case following an order of the Supreme Court. There are as many as 44 chit fund companies of Odisha which are on the list of the CBI investigations.

They take baby steps in banking

Swati Bhan , Aug 17, 2014 :
Children are encouraged to save money

Reserve Bank of India recently said that 10-year-olds can open and operate accounts in banks. But much before the announcement, a bank for the children, by the children and of the children is being run in Ahmedabad.
 Only difference is it is not a registered bank with the authorities concerned. Also, children manage it, withdraw and deposit money in their accounts. The only they know the total assets of this bank. The initiative by  NGO Sarjan was taken to ensure that children get into the habit of  savings.   Children are encouraged to deposit the money in their savings account, even if it is a small amount. Working from a small building in the bylanes of Juhapura in the old city area of Ahmedabad, the bank has been operating for many years now.Now, more children are learning how to operate an account in a bank. Many more are getting interested in saving money to meet their needs and if need be even the requirements of their parents.

Every member of the Children Bank have a pass book and it is updated frequently. Children can withdraw money from their account only after giving reasons and what they intend to do with it. As account holders are children, they need to bring in at least one of their parents to withdraw more than Rs 100. “It is only after parents agree, the account holders are allowed to withdraw more than Rs 100 from their account,’’ says 10-year-old Ayesha, who is also the manager of the bank.
 She says that children withdraw money for buying pencils, erasers and at times notebooks. “It is probably when they want to buy text books or other necessary items that they need more than Rs 50,” says Ayesha. Children can deposit even Rs two in their account. “Children, who come from economically poor background, many a time also have to avail loans to meet their requirement,” says Madina Solanki of Sarjan.She says at the time of opening account, the children take a pledge that the bank will be of some help to them in their difficult days. “The amount deposited by children is generally pocket money. Or sometimes, children  save from the money given by parents for buying foodstuff. So, they should know that if they have to withdraw they have to do that too very cautiously,’’ says Solanki.

She says many account holders are children of daily workers and those who do odd jobs to eke out a living.  She explains that if these children are able to deposit even Rs 10 or Rs 50 it is encouraged by the members.

At present, there are several account holders in the bank and the total deposit now is Rs 19,000. Children say that they do feel proud that they have their own pass book which is updated at the end of every month. “When you see Rs 500 against your name at the end of the month, it encourages you to deposit more by saving more,” said 11-year-old Runaz.  
   She opened her account in this bank when she was a seven-year-old. Ten-year-old Moin Allarakha says that it feels great when he realises that for purchasing a pencil or pencil box he does not have to ask money from his parents. All he needs to do is withdraw from the bank and buy the necessary items.

Another account holder, 12-year-old Sangamat Amreen, says that she had heard about the bank from her friend, who has an account in the bank. “It encouraged me. I would see her go to the bank and draw money to buy notebooks,” says Amreen.She says that children would deposit even Re one or Rs 2 given at home. “If you leave it in the piggy bank at home, you still have the option of pulling it out but by depositing it in the bank, there is an advantage that the money earns interest,’’ said Amreen.

The bank, whose account holders are from the school for dropouts run by the NGO, works on democratic lines. The manager and the cashier are elected through voting held once in two years.

Account holders cast ballots in the elections and the child getting the maximum number of votes is named the manager and the second placed will end up as the cashier. However, those leaving the school cannot continue as members. It is a strict no for those above 16 years.

Children earn a little interest on money exceeding Rs 500.As there are no commercial transactions, the NGO gives the interest amount from its own funds. “This is basically done to motivate the children to save more,” Solanki says.  

Solanki, who guides children on how to manage the bank, says  they are given training on how the bank functions. Awareness programmes are also held every Saturday. “Through the awareness programmes, children get an idea on how to open an account, manage an account and the advantages of keeping money in the bank and helping parents in their time of need,” says Solanki.

She says that similar awareness programmes are also held for the parents so that they keep giving small amounts to children and encourage them to save for a rainy day.

Friday, August 15, 2014

Power Of Majority Can Make Or Mar

Majority does not grant permission to allow reign of injustice. UPA Government enjoyed majority in Parliament but could do nothing to protect the interest of the country and that of crores of poor .

Democracy gives huge powers to elected representatives who are voted to power by majority of votes. But , are all these MPs and MLA doing justice for their voters who elected them to power?

If gang of thousand thieves decides that a deputy commission should not be allowed to visit their village , will government allow such whimsical decisions?

Majority of Directors in Boards and Majority of Ministers in Cabinet decided that Bank management should recruit all officers from campus adversely affecting the career of officers of  one to three decade long experience , Leaders of so called  majority union agreed to it.

It is ultimately the courage of some outsiders that Supreme Court has now given orders to all PSBs to refrain from such campus hiring.

If majority of directors decides that pay of junior officer should be halved, will majority union will agree?

If majority union decides that marketing officers should not be considered as fit for promotion, will it always be justified? And if every year policies are altered as per whims and fancies to accommodate or to reject a class or officers only because bank or union have power of majority, will it be justified ?

If majority of General managers decides to promote Mr. X from scale I to scale V directly, will Majority Union will agree?

Sometimes Rural Development Officers or Credit Officers are considered as Generalists and sometimes specialists. Ever year or alternate year policy is amended taking concurrence of majority union. Is this reign of justice or it is reign of accommodation and manipulation?

Management alters policy for the sake of one officer and promotes him from the post of DGM to GM , majority union agrees why?

If bank management changes rules in promotion policy to promote persons of their choice and then alter the rule next year to promote another batch of their choice , will majority union agree?

Some officers are promoted from scale I to II in 20 years and some in 2 years, majority union remain silent why?

An officers works for bank for three decades to become scale III or IV and bank majority enjoying majority permits campus recruitment in scale III and make him scale IV in 3 years and Majority union remain silent spectator. Is it the benefit of Majority Union?

It is court only which stops reign of injustice when majority of Directors in Board and majority of Leaders unite for any act of omission or commission.

People in general think it better to remain silent , it does not mean every decision taken by Majority is always good and healthy. If it possible that everything is possible only by persuasion , then why is there so much inordinate delay in signing of Wage agreement when unions enjoying support of 10 lac employees are behind UFBU?

Ashok Khemka was transferred by Harayana Government for reason known to all only because Harayana government enjoyed majority of MLAs in State Assembly . Majority of unions remained silent Why? .. to remain in good book of the government?

Rabri Devi wife of Lalu Yadav , jailed CM could become CM of Bihar only because Lalu Yadav enjoyed support of Majority of MLAs. Despite involvement in Chara Ghotala , Lalu could become Railway Minister only because he enjoyed majority. This is India.

There are several persons like Khemka who are silently watching reign of injustice though they all are members of majority unions.

There are several persons like Pawan Bansal who manage deal with CMD of a bank and cause loss to banks by billions of rupees every year. Ultimately it is bank employees who have to suffer , though majority union supported evil works of CMD to remain in the good book of the management.

The task which protective wing called as Union should perform like watchdog, is performed now by court or CBI only because people in higher echelons are using their power gained through majority and granted by democratic principles.

Majority should be used to protect every employee, junior or senior. But it does not mean that majority will abuse all who belong to minority union or an employee who is not member of majority union, Majority does not empower union to transfer persons of Minority union to remote and critical places and give favour to persons of choice of leaders belonging to majority union.

Smt Indira Gandhi during period of Emergency changed the basic structure of Constitution only because she enjoyed Majority in Parliament. It is only Judiciary which saved the country from such dictatorial leaders. It is known to all that power of majority may lead to dictatorial rule, arbitrary rule and rule for serving self interest . If majority is always safe and secure, that there was no need for CBI to look into misdeeds of UPA government in Coal Scam because every decisions taken by Manmohan Singh government used to be decided by Cabinet and okayed by Parliament.

If majority is always safe and secure, then there was no need for CBI to investigate the case of CMD Syndicate Bank because CMD sanctioned all loans only when all members of board and management committee gave green signal .If majority is always safe and sound, then all loans sanctioned by administrative offices should be safe and secure because all such high value proposals are approved by Credit Approval Committee.

Every year cases are filed against bank management by aggrieved office for his rejection in Promotion process , but nothing happens only because management has the support of majority unions and this is why during last three decades and more, all court cases face abortion and miscarriage.

Is it the desired function of any organ enjoying majority?

If marks given in Interview panel is always good , then CBI has committed mistake by advising Government of India to revisit the process of appointment of CMDs which UPA government took and which enable SK Jain to become CMD. If an officer can become CMD in a bank by unfair means, one can imagine what is happening below CMD. Is it power of Majority?

Bank is sick only because majority of directors in Board blindly sign on all proposals CMD places before board, bank is sick , all banks , because members of credit committee sign on all proposals good or bad only to keep the immediate boss . 

Public sector banks are sick only because majority union does not foresee the future of banks if corrupt officers are allowed to loot the bank and then safely retire. This trend and this culture has to be changed for bright future of banks. 

Some officers may be happy because they get quick promotion now, but when bank become bankrupt and they will not get their pay ,accumulated PF or even pension. Even if some officers become GM or DGM superceding hundreds of juniors by indulging in flattery and bribery , but the officers of coming generation will suffer .

It is due to evil works of few offices , few politicians and few administrative officers in GOI that banks profitability has eroded and now IBA is not giving respectable wage hike.

CMDs and EDs of 35 banks became unanimous in sanctioning of Consortium loan of Rs.40000 crore to Bhusan Steel only because majority of CMDs were puppet in the hands of promoters of Bhusan Steel.

All loans amounting to  hundreds and thousands of crores of rupees and sanctioned by a group of banks to Zoom developers , Winsome diamonds ,Kingfishers like companies were passed by majority of CMDs when their proposals were duly approved by a Board and Managing committees constituted by talented top ranked officials . 

This is India where numerous brokers like Pawan Bansal are in the field who motivate top ranked officials of all banks by hook or by crook . These brokers are playing the role of middlemen and motivating or buying all members to  ensure smooth sailing of their desired proposals and quick  passing of the proposals by majority only.

This is possible only in Public sector banks that mere phone call from top official to junior level officers for sanction of loan to a big corporate activates all members of credit approval committees and sanction is accorded in loss of time. 

This is possible in bank only that all members of Interview panel attend Interview Board with few names in their mind to whom they have to promote by hook or by crook. All officers therefore concentrate on strategy how to win the heart of one or two members of Interview panel so that he or she may get through in promotion process. This is called majority culture in public sector bank. 

If majority union says that sur rises in east, it is all right. If bank management says sun rises in the west but union says it rises in the east, here arises dispute. If majority union negotiates with management and come to amicable settlement that sun rises in north , neither east and nor west, will it be considered as justified approach of majority union .
Is it the real functioning of majority approach and will such approach allow reign of justice to survive and prosper is a million dollar question which every prudent banker should ponder over in the larger interest of the working class.

I have given the example of east, west and north because I remember the outcome of IXth Bipartite Settlement signed BY IBA and UFBU in the year 2010 when three to four lac of employees had to sacrifice thousands of rupees to buy 2nd option of pension only because majority of union had signed such an agreement  which was totally and absolutely illegal , unjustified and immoral. In the same bank , almost of half of employees had to swallow the poison only because it was the decision of majority of unions.

Some militant and justice-lovers filed writs in various High courts, but they also later succumbed under the pressure of powerful management and powerful majority unions.It is well understood by all that judiciary in India is full of corrupt people and hence one cannot expect justice from courts even in two or three decades specially when powerful management of banks and powerful unions can spend crore of rupees to ensure either abortion of such court cases or to force miscarriage.Lastly it leads to dictatorial rule by majority enjoying VIPs.

It is true therefore that court cannot deliver the justice . But when all other tools fails , it is only the last recourse which forces one to file a case in court of law for justice. Therefore it is not wrong if a minority union has filed a case in court of law for illegal steps taken by management only because they are in minority. 

Here question arises , why an individual or a minority union though it better to file a court case. It is only when majority union turn a deaf ear to the voice of some individuals who are sufferer.

Gone are the days when one used to say "majority should always be granted"
In the era of reformation, it will not be wrong to say that majority should never be blindly relied upon. Power corrupt and absolute power absolutely.