Wednesday, June 3, 2015

Government Ignores Bankers

Retired Bankers Needs to Unite and Create Awareness Among PS Bank Board Members About Illegally Depriving the Retired Bankers their Demands and Reducing Pension under 10th BPS-By S. Ramachandran and Rajesh Goyal 

In the 10th BPS, retired bankers have been rudely told  that  contractual relationship does not exist between banks and retirees.  Therefore, we  need to go back to the time when 9th BPS was signed in March 2010,   An article in Economic Times in 2010 appeared under the heading “IBA signs revised pension agreement with bank unions” .  The above article included the following comments by IBA Chairman of that time:-

 

"There are the two aspects of our pension offer. There is a renewed pension offer to retired employees (after 1995-96 pension regulations) who earlier had not opted for the scheme earlier. All employees who are on the bank's roll as on March 30, 2010, will be covered under the existed defined benefit scheme. While those who join from April 1, 2010, will be covered under the government's new pension scheme and the government guidelines will be applicable," said MV Nair, chairman of Indian Banks' Association (IBA).

 

Thus, till 2010, IBA was of the firm view that there is a contractual relationship between banks and retirees and thus, the above offer was part of the 9th BPS.    Therefore,  retired bankers rightly  trusted UFBU and IBA, when demands of the retired bankers formed part of the Charter of Demands submitted to IBA, and during 30 months IBA never publicly objected to these demands.   IBA has never allowed the retired bankers associations to negotiate with IBA as UFBU have always included the demands of the retired bankers in their Charter of Demands and claimed that UFBU is only entitled to negotiate even on behalf of retired bankers.

 

Let me here give an overview of some of the demands included in the Charter of Demands by All Four Officers Unions, who were part of the UFBU : -
 
  Part IV : Superannuation Benefits  
      (1)   Pension should also be allowed to be paid on the last pay drawn or 10 months average, whichever is beneficial to the retiring officer;
      (2)   DA be converted as Basic Pension as and when the cost of living index increases by about 50%. 
       (3)   Upgradation of pension above 80 years of age should be made available;
 
(r)    In respect of all earlier retirees, improve the present Basic Pension as per mutual understanding : 
      (a)    Commutation : Should be revised to 40%  and full pension restored after 10 years;
      (b)    DA neutralization should be at par with serving officers; 
      (c)   VRS should be available in the Pension rules also;
      (d)   Pension scheme should be extended to all those who have been denied earlier on the basis of misinterpretation of the understanding reached with IBA; 
      (e) Additional service of 5 years be extended to all retirees;
      (f)    Family Pension should be at par with Govt and be at 30% of last drawn pay.  Be  paid for 10 years or till 70th year of notional age of the deceased;
 
      (g)   New Pension Scheme : Original pension should be paid even to officers who have joined 01.04.2010;
      (h)    Gratuity be paid at rate of one month salary and allowances and without any ceiling and exempted from payment of income tax; 
        (i)     PF should be at the rate of 12% of total salary and allowances.  Should be payable to all employees;
         (j)   Encashment of Leave : Upto 360 days encashment be allowed to all classes of retirees and exempted as to central government employees; 
        (k)  Medical scheme for pensioners / retirees should be framed on the lines available to EDs and CMDs
       (l)    Welfare Activities : Separate allocation be made for welfare of pensioners and facilities like Holiday Home, clinics, transit house be made eligible for pensioners also; 
      (m)   LFC / HTC facility : Extend the same to all retirees
 
The workmen unions too have included the demands of the retired bankers on similar lines in their Charter of Demands
It is interesting to note that UFBU even differentiated between superannuation benefits and welfare activities as the later were a separate category as shown above.
Thus, in nutshell we can say that the retired bankers till the signing of the 10th BPS had firmly believed that UFBU will look after their interest as their leaders have been promising so since they released the Charter of Demands in October 2012.  All retired bankers associations were barred to negotiate for the issues relating to retired bankers as this has been the tradition since beginning and 9th BPS has clearly indicated in its content and as per press interview of IBA Chairman quoted above.
 
However, the signing of 10th BPS proved to be betrayal by UFBU as they totally ignored the demands of the retired bankers inspite of these being included in the Charter of Demands.  The biggest set back was the Record Note signed by IBA and UFBU,  as it read   “demands of retirees can be examined only as a welfare measure as contractual relationship does not exist between banks and retirees. The periodic wage revision exercise based on mandate from member banks cover only wages and service conditions of serving employees. Retirement benefits are based on service conditions prevailing at the time of retirement of an employee and these do not change with settlement”.  

The biggest question which is hunting retired bankers is that what law has changed between 9th BPS and 10th BPS that the contractual relationship between retirees and banks have ceased  to exist now?  Can UFBU quote any such law or IBA and UFBU have done it arbitrarily to merely cheat the retired bankers
 
On 28th May, 2015, we have published an article under the heading  Unconstitutional and Negative Attitude of IBA and UFBU Towards Retirees Exposed -  Pointwise Rejoinder To Record Note of Discussion of IBA and UFBU Relating to Retirees Issues”   by  S. Ramachandran.  In the said article Mr Ramchandran has forcefully rebutted what IBA and UFBU has tried to project by signing the Record Note.     The said article has over 950 facebook likes and over 130 comments, one of the largest in number for any article on this website.    
 
 The reason for this is that retired bankers have realized the reality of UFBU and IBA and have been shaken for the trust they have reposed in them as retired bankers till date were believing that UFBU will look after their interest.
 
 
After the Record Note becoming public, there are only few options for the retired bankers, which include appeals to the right minded people in authority, which are only limited in number, or they should approach the Courts.   The later course is certainly costly and time consuming.   Therefore, now S Ramachandran has sent us a copy of the letter which has written to the Board Members of BoB.   We are publishing the same hereunder.
 
 
S. Ramachandran                                                                               Kunal Icon, Building -A8
Former General Manager, Bank of Baroda,                                     Flat No. 104, Pimple Saudagar,
Former Chairman & CEO, The Sangli Bank Ltd.                            Aundh Camp, Pune – 411027,
(Now merged with ICICI Bank Ltd)                                                 Tel: 020 27201012.
Former Administrator, Madhavapura Mercantile                             E-mail id: ramans1938@gmail.com 
Co-Op Bank Ltd ( Ahmedabad )
Former Director General, Maratha Chamber of
Commerce & Agriculture, Pune.                
 
BY E-mail / SPEED POST
                                                                                                                                     
                                                                                                                                       Date 1st,June,2015
 
APPEAL TO ALL THE BOARD MEMBERS OF BANK OF BARODA ON RETIREES PENSION ISSUES.
Dear Sir/Madam,
                     Subject:- Unconstitutional and illegal attitude of IBA and UFBU in the matter of
                   Retirees issues as spelt out in the record note of discussion of IBA and UFBU
                   dated 25-5-2015
 This has reference to the press note dated 26th May 2015 issued by the Chairman of IBA Mr. T.M. Bhasin clarifying that the Adhoc arrears would be paid w.e.f. 1st November, 2012 immediately after its approval by the respective Boards of Banks and the new scale of pay will be implemented after due process of approval of Revised regulations by the Government of India and its adoption by respective Boards of Banks.
 
 The recommendation of IBA to implement and to pay the Adhoc amount is illegal as IBA’s recommendations have no force of law due to the fact that IBA is unregistered body under the law. Banks which are formed under the law and PSU BANKS are state as per constitution cannot accept such unforceful recommendation of IBA ,if they go ahead it will be against rule of law. The personnel who are public servants as per IPC and follow such recommendations which have no force of law, will be held accountable and responsible and they will be doing it at their peril. 
   
 It is rather unfortunate that all the issues relating to retirees have been kept aside and the issues of only serving employees have been dealt with at the industry level settlement. This is a great injustice to retirees who have given their brain, brawn and blood to the bank’s in their hey days.  It is against corporate ethics and governance for the Board to give effect to such one sided settlement, if at all they believe in corporate governance.  A good number of our pensioners  who retired after 1.11.2012 are hard hit in as much as   their pension is getting reduced considerably by several thousand whereas  in the normal course one expects a raise in pension on account of wage revision.
 
THE WORST SCENIRO IS THAT OF REDUCTION OF PENSION IN CASE OF LARGE NUMBER OF  EXISTING PENSIONERS IRRESPECTIVE OF WHETHER THEY OPT FOR COMMUTATION OR NOT. This is a gross anomaly and a hit below the belt of pensioners.  How can the existing pensioners lose their current pension amount by several thousand on account of wage settlement? FURTHER THE REDUCTION IN PENSION IS AGAINST CONSTITUTIONAL PROTECTION TO THE EMPLOYEES AS PER THE DECISION OF MANIPUR HIGH COURT WP(C) NO 744 OF 2014 DATED22-5-2015. 
 
  The manner in which the special pay concept has been brought in, the employees would be at loss for ever. It is a permanent disability without any external injury. Introduction of grade in the name of special allowance not taken for pension is to reduce the pension to the employees is against the well established practices in the country and elsewhere. When additional pension is released to the seniors to beat the inflation and medical expenses the settlement is against such principle.
 
 In view of what is stated above the Board needs to question such anomaly and deny the approval.  
 Mr Bhasin please be informed that the Hon’ble Minister of State Mr. Jayant Sinha  in  his reply to the Parliament question No.3396 and 2140  has stated that the total amount of Loan written off by the Public sector Banks during the last five years stands at Rs.1,06,170/- crores  and as per RBI data the gross NPA of Public Sector Banks are Rs.2,60.531/ crores as on December 2014. The total number of NPA borrowers of Rs.Ten crores and above as at the end of September 2014 are 2897 with amount outstanding of Rs.160164/- crores. Obviously, PSBs have to make provisions for these NPAs out of P&L whereas in terms of section 10(7) of Banking companies (Acquisition and Transfer of Undertakings) Act, 1970, issues of superannuation funds has prior charge over net profit. These NPA borrowers are enjoying the funds and the employees are being given a raw deal.
 
It is, therefore, our earnest appeal to the members of the Board not to approve such one sided wage settlement and both the Record note1 and Record note no 2 which reduces the pension amount of several existing pensioners by several thousand as, they are illegal, unconstitutional and against all cannons of justice and fair play besides being against corporate governance. Further the unique landmark note on discussion on the retirees issues between IBA AND UFBU will go down in history as a record note or sorts , anti labour , anti elders ,senior citizens and human rights and above all brings to the surface the simmering one sided employee oriented wage talks to the utter detriment of all pensioners and oozing in contents with absolute negativity not even exhibiting an iota of concern to pensioners or any sense of HRD or empathy towards a dwindling species ,totally forgetting the dedication of sacrifice by these elders to the cause and progress of the institution they served  
 We may further mention here that Hon’ble High Court of Allahabad has  already stated that the settlement is subject to decision of writ petition filed by WE BANKERS who have highlighted the reduction in pension of many existing pensioners. Since  the matter is sub-judice, we request you to refrain from giving effect to the settlement and the record note 1 and record note 2.  
 
S.RAMACHANDRAN
FORMER GM BANK OF BARODA (age 77years)
PENSIONER ,AND ON BEHALF OF
THOUSANDS OF AFFECTED PENSIONERS OF
BANK OF BARODA
PUNE 1-6-2015
 
The above letter represents the plight of the retired bankers and betrayal by UFBU and IBA.    I think the above letter should be sent to as many directors of different PS Banks as possible so that an awareness is created among them about the plight of the retired bankers.   This is of greater importance to ensure that this letter reaches independent directors of every PS Bank as law prescribes for certain liabilities for them.   Let retired bankers find out the addresses and emails of the directors of their own banks and send the modified version of the above letter to them through email / regular postal mail.
 
This will help create awareness about the illegal agreement that has been signed in the form of “Record Note” depriving the retired bankers their rights.
I just read on a FaceBook a circular issued by a Retired Bankers Association which appears to be only  a sister organization of AIBOC.  In the said circular they have tried to defend UFBU / AIBOC and claimed that AIBOC will now assist retired bankers in realization of their demands.   This is one of the worst kind of claims after what we have seen in Record Note vs Charter of Demand for 10th BPS.   No one should be befooled by such claims as it is another mode to cheat the retired bankers.
 
 I am sorry to say that only a handful of retired bankers are aware of the intricacies and betrayal of UFBU and IBA.  Others have learnt to suffer and die slow death.    Therefore, there is a need to create awareness among the retired bankers so that they also understand as to how IBA and UFBU has cheated them.  If you understand these, ensure that you tell your friends who have resigned to their fate and have lost the will to fight IBA.   Now maximum number of retired bankers have to be romped in to fight the legal battle.  IBA and UFBU alongwith bank management will try their best to throttle the rising voices of retired bankers. 

Bank staff protests in front of pvt hospital to recover loan-Business Standard-02.06.2015
In an unusual move to recover loan, employees and officials of United Bank of India today staged a protest in front of a prominent super specialty hospital here, demanding repayment of dues worth about Rs 100 crore to the bank.

The protesters were picked up by the police from the spot -- Vikram Hospital -- and later let off.

"Bank employees were picked up and were let off later after warning them. They did not have any permission to stage a protest in front of the hospital," police said.


The bank officials said their Regional Head and Assistant General Managers were picked up by police.

"The hospital has to pay us (bank) a total of Rs 110 crore (towards) loan, they are not paying it. They are also stopping us from holding a peaceful protest in front of hospital demanding repayment," a bank official said.

He said despite giving multiple notices, the hospital was not responding properly.

Clarifying on its part, the hospital termed the bank's action as "unfortunate" saying talks with it were still underway and also the matter was in the court.

"The earlier owners of our hospital had taken loan from United Bank of India. When the new owners came in they had discussed with the bank and asked for restructuring of loan. They had said we will invest and turnaround the hospital and pay back the loan," Vikram Hospital CEO Sudir Pai told reporters here.

He said "The bank had agreed to it then, we had also made some payment, but due to some reasons restructuring is taking time. We are in dialogue with the bank on how to restructure and what is to be done."

"But, all of a sudden last week they said that all outstanding amount should be paid at one time...; while discussions were still on they told us they will stage a protest in front of the hospital and inform public about non-payment of dues," he added.



In a first, China unveils facial-recognition ATM-Times of India

BEIJING: Chinese researchers have successfully developed the first automated teller machine (ATM) with facial recognition technology to reduce the risk of theft, media reports said.

The developers include Tsinghua University and Tzekwan Technology, a Hangzhou firm in eastern China's Zhejiang province that provides security protection for financial transactions. South China Morning Post quoted Chinese official media as saying.

Tzekwan chairman Gu Zikun, an anti-counterfeit technology expert, believes the technology will curb ATM-related crimes. The product has already passed certification and would soon be available for sale.


China currently relies mostly on imported ATM technology, the report said, but the new machine, which combines high-speed banknote handling, improved counterfeit-bill recognition and facial recognition, was wholly Chinese. Gu said the product had passed the authorities certification and would soon be available on the market.

However, it is unclear who will manufacture the ATMs and how it will collect facial data.

The news come a week after the state launched its " Made in China" campaign, which aims to transition the mainland from a manufacturing hub for low-end goods to high-quality products within the next 10 years.

Cash machines using fingerprint authentication have sprung up in countries like Chile and Colombia, though these biometric ATMs have not found favour with some countries like the United States because of privacy concerns and its high cost. These biometrics ATMs are not being used by some countries, such as the United States, because of privacy concerns and its high cost.

The new ATMs are expected to connect with the country's banks and public security networks, which allows only guarantees that only cardholders to withdraw money, even if someone else knows the password.

But opponents to the technology have taken voiced their concerns about privacy and accuracy online. "What happens if someone had plastic surgery to look like someone else," one user asked. "How much will it take to turn my face into Jack Ma's (founder of Ali Baba)? (the founder of Alibaba), questioned another.


http://timesofindia.indiatimes.com/home/science/In-a-first-China-unveils-facial-recognition-ATM/articleshow/47494277.cms

RBI Governor Rajan Asks Banks to Cut Lending Rates: Highlights-NDTV-03.06.2015

Reserve Bank Governor Raghuram Rajan on Tuesday cut the repo lending rate by 25 basis points to 7.25 per cent. The move was widely anticipated given RBI's comfort with consumer price inflation and the marked slowdown in industrial growth. Dr Rajan said banks have started passing on some of the rate cuts by the RBI in the past.

Here are the highlights of what Dr Rajan said:
  • Global crude prices are a risk to inflation
  • FY16 GDP growth target cut to 7.6% from 7.8%
  • Banks have started passing through some of the past rate cuts
  • Volatility in external environment can affect inflation
  • Volatility in external environment can affect inflation
  • Today's policy is neither aggressive nor conservative
  • It is a "goldilocks" policy
  • Mixed signs of recovery in the economy
  • Impact of unseasonal rains moderate so far
  • Monsoon delay, firming of crude prices are risks to inflation
  • Risks to inflation still remain
  • If monsoon is better than forecast, there may be more room for rate cuts
  • If government contains inflationary impact, there may be room for more rate cuts
  • Biggest uncertainty for inflation is outcome of the monsoon
  • Global recovery still slow, getting differentiated across regions
  • We think the economy is in recovery, but it is still slow
  • Government's response to a poor monsoon is most important factor
  • We have done what we could be given the current room
  • Monsoon and policy response is biggest factor on RBI's mind
  • Have to be on disinflationary path
  • We have "erred" a little towards giving impetus to investment
  • Banks have to deal with asset quality issues
  • Banks have been sitting on asset quality issues
  • We want quick clean-up of balance sheets
  • We're talking to banks on dealing with bad assets
  • Have given relaxations on dealing with bad assets
  • Banks have to recognise the problem of bad assets
  • Message to banks: Deal with asset quality issues now
  • Banks need capital to finance lending
  • There are some people who want a weaker rupee, there are some people who want a stronger rupee
  • The markets will broadly find the appropriate rate for the rupee
  • RBI only intervenes to check volatility in the rupee
  • We have accounted for food inflation in our forecast
  • Food management measures can help reduce inflation- the government is looking into them
  • We have plenty of reserves to deal with the impact of US Fed action
  • We still have very weak investment, haven't seen a strong pickup
  • The corporate results have been quite weak suggesting that final demand is yet to pick up strongly
  • Even with 7.5% growth numbers- how much that includes special factors like excise and subsidies is a question
  • Economy is still below potential
  • There have been signs that stressed projects are coming down if you look at the numbers it will take some time to clear up
  • We want to do what is right to keep inflation under control
  • Can't be reckless, we need data to give us more room to move on rates
  • RBI's 25 bps rate cut today is the third cut in 2015
  • Government bonds yields have come down
  • Bond yields are also influenced by international yields
  • The RBI is a not a cheerleader, other people in the economy who can play that role (on why there was no 'booster' rate cut on Tuesday)

 


FinMin, RBI set up panel on reducing cash transactions-Business Standard

Apart from checking the flow of unaccounted money, reduction in cash usage is held to improve cost effectiveness for banks
 
To reduce cash transactions in the economy and boost the usage of cards and point of sales (PoS) terminals, the Union finance ministry and Reserve Bank of India (RBI) have set up a committee to look at ways to encourage use of plastic money.

The committee has representatives from National Payments Corporation of  India, State Bank of India and ICICI Bank. It was formed last month.

A source said it would also look at ways to widen the spread of PoS machines and other enabling infrastructure to increase card acceptance. Last year, RBI had said it was mulling whether to link the deployment of PoS machines by a bank to the number of cards being disbursed.
 
RBI data at the end of December 2014 showed 1.05 million PoS machines in the country, whereas there are over 500 mn debit cards and at least 20 mn credit cards. In 2013-14, according to a Boston Consulting Group report, the number of cash transactions in the economy was 26 per cent of the total; cheque transactions were 19 per cent. Another 37 per cent were through ATMs or cash deposit machines. Transfer through ECS systems was three per cent; NEFT/RTGS use was four per cent. PoS accounted for five per cent and transactions through the internet were six per cent.
 
 The eventual aim is to move to a cashless economy. RBI has said it would soon be issuing a discussion paper on this. This ties in with the government’s focus on addressing the issue of undisclosed incomes. It has taken steps to improve the use of credit and debit cards and has put limits on cash transactions. For instance, quoting a PAN (income tax record) number has been made mandatory for any sale or purchase over Rs 1 lakh.
 
 Apart from checking the flow of unaccounted money, reduction in cash usage is held to improve cost effectiveness for banks. “By digitising processes end-to-end, engaging customers on the digital channel for sales and transactions, and collectively working towards eradication of cash, banks can achieve up to a 30 per cent jump in sales productivity, reduce administrative staff by 10-15 per cent and improve back-office staff productivity by 20 per cent,” said the BCG report.
 

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