Injustice With Retired Bank Staff

Ref: 2015/208                                                             July 19, 2015

The Chairman,

Indian Banks’ Association,

World Trade Centre, 6th Floor , Centre 1 Building,
World Trade Centre Complex,  
Cuff Parade,  Mumbai - 400 005.

Dear Sir,

Reduction of Commutation from the date of retirement                            in cases where Commutation amount is paid much later

The 10th Bipartite Settlement/7th Joint Note is signed on the 25th May, 2015 and Basic Pay and other allowances, counted for calculation of terminal benefits, including pension is also revised, as provided therein.  On account of upward revision of ‘Pay’ which is counted for pension, those retirees who have retired on or after 1.11.2012, Basic Pension is also going up.  Consequently, they are also entitled to commutation amount on the one third of increased portion of basic pension.  Banks are reducing this portion of Basic Pension, which is commuted, from the date of retirement, instead of reducing from the date of payment of this pension. Similarly, whenever there is delay in payment of a portion of Commutation, on account of decision of Courts, Errors in calculations, sanction of increments/revision in pay, etc. the Commuted portion of increased Basic Pension is also being reduced from the date of retirement.  This practice is causing a loss for such of our members who have received/are receiving a portion of commutation much later.  This portion could be reduced for a period of fifteen years only from the date of payment of commutation amount.  However, Commutation factor as on the date of retirement needs to be reckoned, as the Commutation amount has become absolute on the date of retirement and commutation of one third of ‘pay’ was sanctioned without quantifying the commutable amount. The Bank Employees’ Pension Regulations do not provide for such practice.  The Regulation 56 of Bank Employees Pension Regulations provides for reference to Central Civil Services (Commutation of Pension) Rules, 1981, in case of doubt.   Rule 6(1) b, 6(2) and 10(A) of Central Civil Services (Commutation of Pension) Rules, 1981 clearly provide for

1. Reduction of commuted portion of increased Basic Pension, for a period of fifteen years from the date of payment of such commuted amount;

2. Commutation Factor on the date of retirement is reckoned for calculation of Commutation amount.   

Relevant portions from Bank Employees’ Pension Regulations and Central Civil Services (Commutation of Pension) Rules, 1981 have been extracted and furnished here below for your ready reference.  

Banks may also refer to their practice in respect of reduction in commuted portion of increased Basic Pension of Central/State Government Pensioners, to whom these Banks are disbursing pension, on account of revision in terms of Pay Commission Reports, Court Orders, Government Orders, etc.  Any difference in methods of reducing commuted portion of pension of Central/State Government pensioners and Bank pensioners is impermissible in view of what is provided in Regulation 56 of Bank Employees’ Pension Regulations and  Rule 6(1)b, 6(2) and 10(A) of Central Civil Services (Commutation of Pension) Rules, 1981.

Therefore, we request you to kindly advise the member banks to reduce commuted portion of the Basic Pension from the date of payment of commutation amount only and not from the date of retirement.  As member banks are parties to Bipartite Settlement/Joint Note dated 25th May, 2015, it would be more appropriate, if they are advised to revise the system immediately.

Thanking you and with regards,

                                                                          Yours Sincerely,

                                                                               (S.C.JAIN)

                                                                     GENERAL SECRETARY

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Extracted from Central Civil Services (Commutation of Pension) Rules, 1981 :

6(1) The commutation of pension shall become absolute in the case of an applicant referred to

    .   .   .   .   .   .   .   .

Provided that –

(b) in the case of an applicant who is drawing pension from a branch of a nationalized bank, the reduction in the amount of pension on account of commutation shall be operative from the date on which the commuted value of pension is credited by the bank to the applicant's account to which pension is being credited.

.   .   .   .

(2) In the case of an applicant referred to in Rule 9 or Rule 10, the commuted value is paid in two or more stages, the reduction in the amount of pension shall be made from the respective dates of the payments as laid down in Clause (a) or Clause (b) of the proviso to sub-rule (1).

10 A. Restoration of Commuted Pension:

“The commuted amount of pension shall be restored on completion of fifteen years from the date the reduction of pension on account of commutation becomes operative in accordance with rule 6:

Provided that when the commutation amount was paid on more than one occasion on account of upward revision of pension, the respective commuted amount of pension shall be restored on completion of fifteen years from the respective date(s)”

Extracted from Frequently Asked Questions (FAQs) (Central Civil Pensioners)  (http://pensionersportal.gov.in/FAQ_Civil.pdf)

G.12.  What would be the age to be used for commutation of additional commutable pension and which factor would be used for such additional commuted value of pension ?

The age reckoned for calculation of commuted value of pension at the time of original application for commutation of pension will apply for calculation of commutation value of additional commutable pension. However, as mentioned in the OM dated 2.9.2008, the commutation factor in the revised Table of Commutation Value for Pension will be used for the commutation of the additional amount of pension that has become commutable on account of retrospective revision of pay/pension.

G.13     From which date the reduction in pension on account of additional commutation of pension will take effect?

Reduction in pension on account of additional commutation of pension will be in two stages as per the provisions contained in Rule 6 of the CCS(Commutation of Pension) Rules,1981.

G.14 What will be the date of restoration of additional commutation of pension?

The commuted portion of pension shall be restored after 15 years from the respective dates of commutation as provided in Government of India decision No.1 under the Rule 10 of CCS (Commutation of Pension) Rules, 1981. Necessary endorsement should be made on PPO.

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Despite several steps taken by Government of India and Reserve bank of India during last five to ten years , they have miserably failed to stop rise in bad debts in banks. Though GOI and RBI adopted many  so-called reformative policies and gave maximum freedom to public sector banks , they completely failed to ensure good health of PS banks. It is all because all efforts are directed in wrong direction. They have never tried to understand the root cause of growing sickness .

After all why only PS banks in particular and PSUs in general  are unable to perform and why they always fail to keep good health is a million dollar question which top ministers and top officials should ponder over to arrive at a fittest solution which can ensure best health of public sector undertakings including banks. They have to revisit  all  political, administrative, financial , Human resource , legal and other relevant policies to ensure good health of not only PSUs but employees working there.

Unfortunately, the team of flatterers which surrounds top ministers and top officials are prescribing wrong medicine to cure sickness of banks and PSUs in general. This is why  no improvement in health of any bank is visible and most  of PSUs including BSNL, Indian airlines, power generating companies, power distributing companies are suffering from various diseases,.

Prime reason is that Human work force is not loyal to their organisation and bitter truth is that an honest and sincere worker cannot survive with respect and dignity if he does not involve himself in art of flattery and bribery. Management of banks have failed to create loyalty and attachment to organisation in the minds of staff. Unless and until this culture of flattery and bribery is changed and stopped , good performers cannot give their best and bad performers will continue to rein and rule over organisations they serve.

The culture will change only when politicians who rule the country change their culture and attitude towards good workers . They change policies and rule of game every year for betterment but the fact is that situation moves always from bad to worse. Because rules are altered to accommodate flatterers and not performers. There is nepotism and favouritism at all levels.

 

NPA touches Rs.6 lakh crore-The Hindu

Banks in India have accumulated Non Performing Assets (NPA) of Rs.6,00,000 crore, the Public Accounts Committee (PAC) of Parliament has revealed.

 

PAC chairman and senior Congress leader K.V. Thomas said here on Monday that 54 per cent of the bad loans were advanced to corporate houses. Nationalised banks accounted for more than Rs.4,00,000 crore to Rs.5,00,000 crore of NPA. The PAC, in its report to Parliament, would recommend steps for recovery of bad loans. This was the first time the committee had assessed the NPA of banks.

 

Addressing a Meet the Press programme organised by the Thiruvananthapuram Press Club, Mr. Thomas said banks were adopting a lenient approach to corporate houses defaulting on loans when students and farmers were finding it difficult to get credit. “The banks justify their stand on the grounds that most of the loans were for infrastructure projects such as coal mines or airports.”

Bad loans: PAC to send questionnaire to banks-Times of India-20th July 2015

KOCHI: In an attempt to tackle growing bad loan menace in banks, the Public Accounts Committee (PAC) of the Parliament will send questionnaire to nationalised banks within a week's time, said K V Thomas, chairman of PAC.

"We had the first interaction with the banks, and on the basis of that, we will formulate the questions to IDBI and other nationalised banks. The banks will get 15 days' time to respond to it and we will scrutinise it, which will take one month," said Thomas.

It is estimated that country's public sector banks account for nearly Rs 2.55 lakh crore of bad loans, while the banks in the private sector account for Rs 31,461 crore.

"There are arguments that huge amounts are given to infrastructure development, like coal mining. Unless and until those projects complete on time, the repayment of the money won't be possible. This is what we are analysing now," Thomas said.

Towards the end of FY15, State Bank of India, one of the major banks hit by bad loans, registered a gross NPA of Rs 56,725.34 crore and net NPA of Rs 27,590.58 crore. During the same period, Punjab National Bank had gross NPA of Rs 25,694.86 crore and Net NPA of Rs 15,396.50 crore.

Similarly, IDBI Bank had a gross NPA of Rs 12,684.97 crore and net NPA of Rs 5,992.52 crore. Bank of Baroda had Rs 16,261.45 crore gross NPA and Rs 8,069.49 crore net NPA at the end of FY15.

CBI to beef up capability to check bank frauds-Hindu Business Line

The Central Bureau of Investigation (CBI) said it is enhancing its capacity to curb banking fraud in the country as the situation on bad debts or non-performing assets (NPAs) is becoming ‘grim.’ “We will be adding to the units that we have, such as the banking security and fraud cell. We will not only upgrade our capacity, but also set up new units, as we have in some metropolitan cities, and add more branches,” CBI Director Anil Kumar Sinha told BusinessLine on the sidelines of the Conference of Chief Vigilance Officers of Public Sector Banks and Financial Institutions here on Friday.

 

To augment the capabilities of investigators and prosecutors, the first batch of 30 CBI officers will begin training in handling advanced financial crimes from July 27 at IIM Bangalore. These are among 185 officers to be trained at this IIM and National Law School during this year. The CBI is also in the process of setting up a centralised technology vertical to support investigations in areas of cyber forensics, mobile forensics and forensic fraud examination.

 

Bad debts or NPAs rose to ₹2.22 lakh crore in 2014 from ₹45,000 crore in 2009. In percentage terms (of gross advances), the NPAs have grown to 3.8 per cent in 2014 from 2 per cent in 2009. “If we add to the NPAs, the poorly performing restructured loan accounts and other sub-standard assets, the situation becomes more grim,” Sinha said in his address.

 

He said while the NPAs were growing since the past five years, there was under-reporting of frauds for a variety of reasons linked to the larger issue of corporate governance in banks. ‘Deliberate undue accommodation in big ticket lendings’ was also found.

 

‘A lethal parasite’

Later, terming fraud in the financial sector as a ‘lethal parasite,’ Minister of State for Finance Jayant Sinha said 65 per cent of the total fraud cases reported by banks were technology-related frauds (committed through/at internet banking channel, ATMs and payment channels like credit/ debit/pre-paid cards) while the advances portfolio accounted for a major proportion (64 per cent) of the total amount involved in frauds.

He said the RBI is in the process of designing a Central Fraud Registry, where banks would be able to access key details of previous frauds. “The creation of such a database at the RBI will make available more information to banks at the time of the start of a banking relationship, extension of credit facilities or at any time during the operation of an account,” he said, adding that the CBI and the Central Economic Intelligence Bureau have also expressed interest in sharing their own databases with banks.