Bank employees of Public sector banks should summarise reasons for poor performance of PSB in profit and place before GOI to stop GOI tarnishing image of bank staff. Otherwise GOI will continue to impose their ideas and work load on PSBs and continue to build pressure on making finance to some sector or the other and also advise for write off of bad loans . And when Bank's profit is adversely affected , they will deny wage hike in forthcoming Bipartite Settlement. Bankers should start building pressure on GOI from now itself for making XI Bipartite settlement a grand success.
It is banks which at least earn profit every year despite all wrong policies of the government, despite several administrative shortcomings and legal lacunas. There are many departments of Central government which do not earn any profit or do not even serve common men but their staff get all benefits and all terminal benefits. There are many Public sector undertakings which are running in losses for years and decades, still they are paid all benefits including bonuses. Government may make budgetary allocation for all such loss making entities as they infuse capital in sick banks or in weak banks.
Why not GOI can make budgetary allocation for payment of pension to retired bank staff and bonuses to working bank staff ?
Some section of bank staff are of the opinion that IBA is not the competent body to negotiate with bank unions. Some of them are of the view that GOI should directly talk to union leaders on the issue of wage revision. Such employees should come forward with suggestion as to who should replace IBA in negotiating process.
It is wise to plan from now than to blame leaders when they start negotiation process with IBA. Further if bank staff aspire to join hands and to tag their future with Central Pay Commission , they should go for referendum on this controversial issue too now itself. So that a unanimous or consensus view is arrived at whether to continue with process of bipartite settlement or to become part of pay commission set for central government employees . For this purpose banks may organise district level voting at all India basis to arrive at a view which may be applicable and acceptable to all bank staff.
IBA says that they are under obligation to revise wages of working employees and not retired employees. IBA says that revision of pension is a part of social welfare agenda and they will look into demands of pensioners in due course.
Are retired bank staff a load on GOI and employees of central government and that of armed forces not such burden?
This question has to be answered now to avoid to provide safety to retired bank staff.
After all, bank staff belong to core financial sector of the country and it is they who can protect health of banks as armed forces protect the country from enemy country. It is bank staff who take part in all social welfare schemes of the government as armed forces take part in relief measures.
There is no reason to deprive bank staff of respectable wage hike or for respectable pension only because asset quality of banks is facing deterioration and banks are facing erosion in profits. It is poor management of banks by GOI and exploitation of banks by GOI only which results in lesser profits and greater bad debts in public sector banks. As such bank staff cannot be punished for fault of GOI and top officials of banks.
What is one rank one pension?
One Rank, One Pension is an old demand of Indian military personnel. The term means armed forces personnel holding the same rank and same length of service will get the same pension, regardless of the last drawn pay. The Indian government accepted the demand in 2014. In its July 2014 Budget, Government of India allocated ₹1000 crore for this scheme. Due to some technical calculations and interpretations to be concluded by the related ministry there was a delay in the implementation of the scheme in 2014.
Recent meetings have been on the positive note indicating that the scheme will be implemented before the approval of budget of India 2015-16. due to a fear that civilian retired employees of central govt may also demand drop the defence minister decided to rename the defence pensions as military pension which could not possibly claimed by civilians sought to put the proposal before parliament in the budget session ii of the 2015 commencing from April 2015 and promised implementation in may 2015.This was disclosed by an ex-servicemen org member who had a meeting with Parrikar on 23 April 2015 and put up on the official web site pib nic .in later on when the DM spoke in a civilian function.
While inaugurating a top defence accounts dept controllers meet on 30 April 2015 he asked the dad officials to be prepared to implement OROP orders shortly. There are unsatisfied elements and opposition party sympathisers in ESM ,as veterans are called in India, community who sledge the govt as well as defence minister for delay in implementation of the scheme but in fact govt of BJP led by Narendra Modi is losing goodwill of mostly pro ESM community in state elections as witnessed in Haryana and in Delhi. This could also reflect in electoral reverses in crucial states like Bihar for BJP where there are considerable ESM population who could stand still for the party or give them thumping victory for the saffron party with OROP announcement.
Pension payment by bank management to retired bank staff is not a charity by government to retired staff. It is not a third terminal benefit like that of SBI or other central government services or like old age pension. Pension for retired bank staff is in lieu of contributory Provident fund.
Bank staff who have opted for pension has refunded banker's contribution towards PF. Lacs of bank staff had to forgo thousands and lacs of rupees out of arrears generated after wage revision in IX Bipartite settlement to motivate IBA, UFBU and Government to buy second option for pension.
Where has that money gone?
Have banks stopped contributing in pension fund?
Are banks treating that fund as part of profit?
This has to be investigated.
It is to be noted that many banks did not make any contribution or made inadequate provision for pension fund before 2010 and it was exposed by financial experts after analysis of annual report of many banks including SBI . AT that time RBI had permitted some banks to amortise accumulated expenses in five years as a special case. Many banks in the past had inflated profits by not making adequate provision towards expenses in terminal benefits accruing to bank staff after their retirement.
It is unfortunate that bank management think Contribution towards PF or Pension in NPS as a part of burden on banks . Management of public sector banks want to inflate profit by curtailing the rights of bank employees and by not making adequate provision towards these financial, legal and moral obligations. There is no doubt in it that Banks are legally and morally bound to contribute equal amount of PF towards pension fund as much as employee is contributing towards PF . In case of bank staff coming under NPS scheme , banks are to contribute 10 percent of basic and DA(Both).
Banker's contribution towards PF or towards pension or in NPA scheme is a mandatory requirement and is part of salary . As such when basis pay of working employees is raised, PF contribution towards PF fund or contribution towards pension fund is supposed to be increased and hence there should necessarily be a rise in pension amount and rise in benefits accruing to retirees.
In case of major part of government employees , government has to made budgetary allocation for payment of pension , but in case of only Banks, that government has not to make any budgetary allocation , it is largely the profit generated out of pension fund which is given in form of pension to bank staff on retirement. It is earned by bank staff by their three to four decade long service to banks. It is not the alms which bank management or GOI give to retired bank staff. And I am of strong view that if each bank honestly contribute to PF/Pension fund as per rule every month , there will be no scarcity of money for payment of fund and for hike in pension.
When a staff works for 3 to 4 decades, his loyalty is compensated by employer by contributing every month at least ten percent of basic pay towards pension fund and then it is the duty of trust or managing body which manages pension fund to earn more and more interest or profit by investing in various funds and share more and more with retirees.
It is therefore not a case of social welfare , not even a social security step but it is the fruit of trees which employees nourishes for decades. As such IBA and UFBU should immediately stop misinterpretation of pension payment policy and stop curtailing the rights of retirees of getting enhanced pension after each Bipartite Settlement.
On the one hand government is considering the proposal for sanctioning one rank one pension for all armed force personnel, on the other, same GOI is trying to stop hike in pension to retired banks .
It is important to note here that government departments like BSNL, Coal India Ltd ,Railways incur losses in huge volume, still they are paid bonus or ex-gratia every year whereas bank staff are denied such bonuses even though each bank earn profit every year.
UNCONSTITUTIONAL AND NEGATIVE ATTITUDE OF
IBA AND UFBU TOWARDS RETIREES EXPOSED-POINT
WISE REJOINDER TO RECORD NOTE OF DISCUSSION OF
IBA AND UFBU RELATING TO RETIREES ISSUES
By S. Ramachandran
(source: Allbankingsolutions.com By Rajesh Goyal )
We reproduce hereunder the letter from S Ramachandran addressed to Secretary, DFS, which gives point wise rejoinder to the points listed in the Record Note relating to retirees issues in the 10th BPS. The affected retire must share it with other retired bankers and may give their suggestions in the comments column :-
OF IBA AND UFBU TOWARDS RETIREES EXPOSED-
POINTWISE REJOINDER TO RECORD NOTE OF
DISCUSSION OF IBA AND UFBU RELATING TO RETIREES
All the above acts of the government clearly and categorically lead us to only one thing that the Government in its wisdom has given due credence to the judicial pronouncements and has considered it necessary to continue its obligation towards the retirees by way of improvements in pension/ family pension and so on. When this is the fact, the moot question is that – is the wisdom of those who govern the country less than that of IBA when they state that there is no contractual obligation post superannuation?
On LFC and Hospitalisation
Hospitalisation scheme would be extended to retirees also but subject to the condition that cost of the insurance premium would be payable by retirees.
In RBI Group Insurance policy grade wise is available with ceiling in limits; such a scheme is required without payment of insurance premium as available in RBI. On LFC parties cannot take arbitrary decision; Even in case of Government Employees, Medical facilities are available post retirement. The need for Hospitalisation is more pronounced since officers of the Bank work under stressful conditions taking huge risk which is reflected in the form of health issues post retirement. This fact is admitted by even the UFBU.
While the IBA is sympathetic to the issue, the cost involved is significant and unaffordable at the present juncture. IBA will examine cost implications and sustainability of each bank, at a future date.
Here again, IBA has not come out with facts and figures. Future date should be certain and it cannot be vague. Improvement in Family pension is implemented in RBI. Our scheme is on the lines of scheme available in RBI and Government. So this need not be discussed, as it is already settled issue and it should be implemented from the effective date as the date of implementation in RBI.
100% D A Relief
Firstly the matter is sub-judice as certain cases on this issue are pending for a decision with SC. As such IBA cannot take a decision at this stage. From a humanitarian point of view, IBA may examine feasibility of providing 100% dearness relief neutralisation to pre-November retirees based on a detailed costing exercise
This issue is implemented in RBI. Our scheme is on the lines of scheme available in RBI, so this need not be discussed, as it is SETTLED ISSUE and it should be implemented from the effective date from FEB 2005 as the date of implementation in RBI. They have to refer the clause 12 of the pension settlement dated 29.10.1993, which says that, Provisions will be made by a scheme, to be negotiated and settled between the parties to this Settlement by 31st December, 1993 for applicability, qualifying service, amounts of pension, payment of pension, commutation of pension, family pension, updating and other general conditions, etc. on the lines as are in force in Reserve Bank of India. Another ridiculous stand how can they mention “subjudice” when in the past “Revision in pension” and “Five year notional service” and “2ND option for pension “were implemented when the relative matters were “SUBJUDICE”?
On upgrading the Basic pension at the common and uniform index of 4440 points
IBA would examine the cost implication and sustainability of member banks.
Section 10 (7) Banking Companies ( Acquisition and Transfer of Undertakings ) Act, 1970 says “After making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds and all other matters for which provision is necessary under any law, or which are usually provided for by banking companies, a corresponding new bank [may out of its net profits deal are a dividend and retain the surplus if any.” That is to say, our issues of superannuation funds has prior charge over net profit. Provisions for advances, depreciation on assets and other provisions are made automatically without noise in the banking industry by banks and sustainability of individual banks is thought of at this juncture, when the question of retiral issues of superannuation funds comes IBA ad UFBU make big noise and talk without the base of legal plat form.
Up gradation of pension for all existing and family pensioners
In view of Huge additional cost involved in funding the Pension Fund as per the requirements of AS-15-R, it would be impossible to consider this demand.
Section 10(7) Banking companies (acquisition and transfer of undertakings ) act 1970 and settlement dated 19.10.1993 para 10, prevails over the Accounting Standard – 15 [Revised 2005]. Hence there is no meaning in the stand of IBA and UFBU. What is the huge additional cost is not quantified, without such quantification; the argument/stand of the signatories will not survive the test of law. I also do not understand as to why they kept quite for more than 900 days during which period IBA could have easily collected this information from banks
Periodical updation improvement in pension along with occasions of wage revision of in-service employees on the lines of central government.
This being a funded scheme in lieu of contributory PF, as it is banks are contributing several times to statutory PF contributions towards funding pension scheme every year. Hence providing for periodic updation is not possible as this will have serious impact on the working of the banks.
My observations as above on affordability etc remains the same on this issues. Section 10(7) Banking companies (acquisition and transfer of undertakings ) act 1970, says, after making provision for bad and doubtful debts, depreciation on assets, staff cost and superannuation benefits, other provisions required under law, net profit can be used for payment of dividend to the owners. The import of the above is that :
1. Provision is to be made for bad and doubtful debts, whereas after the reforms and as per IRAC provision is to be made on sub standard assets also. Legally speaking, provision on sub standard is an additional stress on the profits.
2. Further provision is made on standard assets also as per international standards and that is also additional stress on the profits.
3. Depreciation on assets is to be made,
4. other provisions as per law to be made,
That is 1 to 4 above are automatic and compulsory and at the time of making automatic and compulsory provision on the above 1 to 4, nobody talks about sustainability of banks. Sometimes provisions have eroded the reserves and capital and central government has pumped in additional capital from the resources of tax payers.
5. When staff cost and superannuation cost, is to be made, this is the struggle the pensioner has to make, when his legal right is to be enforced.
Government guidelines permit banks to provide benefits to retirees out of Welfare Funds. This may be taken up at the bank level.
First of all banks have to entertain discussion with representatives of retirees and their representative should be on the board of welfare fund. In Bank of Baroda, Welfare fund is misused for payment of canteen subsidy to in service employees against the central government guidelines. The one of the signatories of this Record Note of Discussion is from Bank of Baroda, is well aware of this illegal payment. But he maintains silence against his own conscience.