Bank Management Commit Fraud In Pension fund
Scam on bank employees pension fund in the name of Amortization of the pension cost.
by Sudhakar Rao ( Collected from Face Book)
RBI circular No DBOD.No.BP.BC:80/21.04.018/2010-11 dated 09.02.2011 permitted amortization of enhanced expenditure of pension liability on account of new pension option under 9th BPS and amendment of Payment of Gratuity Act 1972 to banks, at the request of IBA vide guidelines on Prudential Regulatory Treatment.
Accordingly -19- PSB amortized Rs 19611.57 crore as on March 2011. This amount of Rs 19611.57 will be deposited in -5- yearly installments ending 2015 in the pension fund trust.
When existing employees have deposited their 2.8 times of basic pay and retired employees have refunded 100% of provident fund and addition 56% cost in one installment, why the banks have not deposited this 19611.57 cr in one installment.
Is it not a loss to the pension fund?. The 9% average return on amortised pension cost of Rs 19611.57 will add to pension kitty by 1765.04 cr per year.
When our Annual wage rise was Rs. 4816 (Rs. 2239 crores for officers and Rs. 2,577 crores for award staff) w.e.f. 1-11-2007 agreed as per 9th BPS (CIRCULAR NO. 85 dated 29 / 11 / 2009 of AIBOC). Loss of interest of Rs 1765.04 cr to pension fund is equal to 40% of wage rise offered in 9th BPS. Will you allow such crime/loot on your pension fund to continue?.
Can RBI allow amortization of pension cost to boost the banks profit and falsify the balance sheet?.
Can RBI allow Banks to amortize interest payable on FDR of customers and deny them the quarterly/ annual interest in the name of amortization and allow banks to boost their profit.?
Can RBI allow amortization of depreciation to boost the profits?. Is it not a fraud on the pension fund? Is it not a fraud on the balance sheet of banks?.
(d). The total pension scam in the Banking industry will exceed more than 1 lac crore if you take the SBI Rs 10400/cr plus amortization 19611 cr plus 10% statutory not deposited plus incremental cost not deposited since 01.11.1997.
(e) RBI in their Annual financial Inspection has repeated commented during Annual Financial inspection (AFI is yearly exercise) since March 2006 on Adequacy of staff related provisions: “The bank made provisions of 1012.09 crore (PY:630.62 crore) towards employee liabilities, including 365.98 crore being one fifth of liabilities towards new pension optees based on deficient demographic and economic assumptions. The actuarial assumptions of attrition rate of 2% or the return on funds at 8% were not based on actual observations. The fair value of fund had been arrived at without revaluing the entire investments of the fund. The actuarial assumptions of 2% escalation of basic salary and DA each, based on the inflation rate of 4% was out of sync with the actual inflation trend of above 8% throughout the year or 7.99% during 1969-2010.. The additional liabilities owing to above lacunae and funding thereof would have significant impact on the bank’s financials. (Action-Critical). No Action taken and RBI closed its eyes
(f) Will UFBU leadership rise to the occasion and expose these serious crime on your retirement funds and will join the common work force who is fighting the battle in the court against such injustice?.
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